The use of office space in the UK is changing rapidly due to changes in work culture, economic shifts, and technological advancement. Coworking spaces, once meant only for freelancers and start-ups, have gone popular and are now changing the way mid-sized enterprises operate. By 2025, the UK coworking market is expected to grow to $1.44 billion, with research showing that the market will grow by 7.11% per year (CAGR) to $2.48 billion by 2033. This growth is not just a post-Covid recovery—it is a revolution of the workplace culture. This article outlines the major factors that are fueling this change and what the stakeholders can expect in the next few years.
Market Drivers: The main drivers of change are flexibility, cost control, and hybrid work. Hybrid work models have revolutionized corporate real estate plans. A 2025 survey showed that 45% of UK companies intend to reduce the size of their offices by the end of the year, and 18% have downgraded the space since 2020. This is in line with a larger trend of moving towards shorter lease terms as organizations seek to manage the size of their teams and avoid long-term financial commitments. For SMEs, coworking spaces are a godsend: to have access to premium locations such as the financial district of London without having to pay for it. For instance, flexible offices located outside London can now accommodate teams for less than £265 per person per day with high-speed internet and collaborative spaces.
Landlords are responding to this demand by retrofitting existing properties. According to the 2024 infinitSpace study, 54% of the office space in the UK can be devoted to flexible workspaces by 2030, while today it is 36%. It is also important to note that 10% of landlords expect that more than 90% of their portfolios will include coworking solutions in the same time frame. This shift is especially visible in Manchester and Birmingham, where developers are transforming former retail spaces into dynamic coworking complexes.
Geographic Hotspots: London continues to dominate, but regional growth picks up pace. London has recently been recognized as the world’s leading market for flexible office space. The city has almost full occupancy rates, which are 83% due to its high number of startups, fintech companies, and small offices of international companies. However, secondary cities are emerging. The number of people joining coworking membership in Bristol, Leeds, and Edinburgh has increased by 40% since 2023 thanks to affordable rents and improved transport links. This trend is represented in Bromley, where operators like Kingfisher House Business Centre provide different levels of membership for the solopreneur and the corporate team.
The regional growth is also enabled by the local councils’ efforts to streamline the planning permissions for mixed-use developments. For instance, Manchester’s „Flex Space Initiative“ exempts businesses from business rates for landlords who devote 30% of their buildings to coworking units. Such policies are important as organizations focus on proximity to talent rather than the traditional London premium.
Sustainability and Design Innovation: Today, sustainability is a non-negotiable factor for contemporary workspaces. By 2025, 68% of the new coworking developments in the UK will include energy-efficient systems, recycled materials, and biophilic design features such as living walls and natural daylight. For example, the Oasis Workspace in Brighton became net zero in 2024 with solar panels and rainwater harvesting, a model replicated in Glasgow and Cardiff.
Landlords also provide „green leases“ with coworking packages that include carbon footprint reporting and incentives for members who use public transport. These initiatives align with general corporate ESG targets, making sustainable coworking spaces the new magnet for ethically minded tenants.
Legal and Operational Considerations: Although coworking is convenient, operators and users have to deal with changing regulations. In the UK, the law requires 5 square meters of space per employee, along with employer’s liability insurance and fire safety compliance. For landlords, transforming conventional offices into coworking zones may involve upgrades such as accessibility and ventilation—a process that can cost £50 to £100 per square foot.
Getting planning permissions is still unclear for home-based coworking setups. While incidental use (e.g., a freelance graphic designer working from a garden office) does not usually require approval, frequent client visits or external signage may attract council attention. It is therefore advisable to check with local authorities to avoid incurring penalties due to a lack of planning compliance.