Micro-Apartments in the Luxury Buy-to-Let Sector | RWinvest Skip to content

The Rise of Micro-Apartments in the Luxury Buy-to-Let Property Sector

Don’t miss out on the best new investment deals. Enter your details now to sign up to our mailing list and receive exclusive information straight to your inbox.

    Does Good Design Come in Small Spaces?

    Chronic lack of supply in the UK buy-to-let property market has led to a rise in ‘micro-homes’.

    Demand from renters has hit new highs recently, with Rightmove reporting a staggering 25 enquiries per property in August 2023. This has led to massive rental inflation, and with space now coming at a premium, it’s no surprise that smaller homes are becoming the norm.

    So, how have property owners adapted to this new normal? As mentioned, micro-homes and micro-apartments are one result, and some smart design choices are being made to make smaller apartments as appealing and comfortable as possible.

    While upsizing has been the general aim for most people in the property industry, many renters now consider ‘micro-living’ a lifestyle choice with plenty of its own benefits.

    Exciting New Liverpool Development With Assured Year 1 Returns From £10,497

    Enquire About SoapWorks Today, a Stylish New Addition to Liverpool's Evolving Cityscape. Prices From Just £174,950 With 6% NET Yields.

      Hand in between house model and a bag of money with question mark printed on it

      Why is Micro-Living on the Rise?

      UK rental demand has sky-rocketed in recent years due to the growing population and changing lifestyles.

      As more rental properties are required to meet the ever-increasing demand, the average living space per person has also decreased in tandem. According to GLA Housing and Land data, the average floor space per person for tenants in the English private rental sector fell from 34.1 square metres in 1996 to 28.6 square metres in 2018. In London, renters have even less space, down from 30.6 spare metres in 1996 to 24.6 per square metres in 2018.

      With these conditions in mind, investment property in London is particularly well primed for the micro-living trend – the rise of micro-apartments was reported last year in the capital, where space comes at an exorbitant price.

      Further Reading: Discover the best areas in London to invest in property and learn more about long-term property investment.

      Discover West One Manchester – Your Path to High-Yield Investments in 2025!

      Modern Salford living with stylish units, luxury facilities, 6% projected NET returns, and excellent capital growth. Secure your future in Manchester's booming property market now.

      Rice Works

      Compact Single-Living Apartment Trend Hits Major Cities

      Unfortunately, London is home to expensive, cramped flats as demand and rental costs are so high. This has given micro-apartments somewhat of a bad reputation.

      However, unlike the stifling micro-flats of London, the pivot towards compact single living has also hit the luxury property sector, resulting in some innovative designs and storage solutions. When it comes to the micro-living movement, it’s all about making the most of the available room rather than sacrificing personal space to save money.

      This lifestyle choice is becoming increasingly popular in major UK cities. According to research from Which?, many micro-properties have been built in urban areas like Leicester, Liverpool, Cambridge and Bristol in recent years.

      Small flats in urban areas will likely experience high demand from young professionals and students, who find more affordable and smaller living spaces convenient for their lifestyles.

      For example, Manhattan apartments are a riff on the classic studio, but by making the bedroom feel separated from the rest of the flat, they give the impression of distinct areas and added privacy. Manhattan apartments in Heaps Mill and Rice Works, two new-build properties in Liverpool, are 10-20% smaller than the average one-bedroom apartment, but with efficient use of space, they boast a luxurious and comfortable interior.

      Get Up to £8,000 Off Your Property Purchase in 2025!

      Kickstart your property investment journey in 2025 and let us cover the cost of the new 2% stamp duty tax surcharge on second properties. Don’t miss out! Register your interest today and unlock huge savings.

        renter-investor-investment-house-property

        More Affordable for Both Tenants and Investors

        While many tenants are content to live alongside their friends, family, or partner and split the costs, others are more comfortable residing independently. With persistently soaring rents, it is becoming increasingly expensive to live alone.

        However, the size of an apartment is typically reflected in the rent, meaning savings can be made by opting for a pint-sized home, making solo living more viable.

        Property investors can also benefit from the cheaper price of investing in a smaller property. The rental income is often higher as a proportion of the property value, potentially leading to a more lucrative rental yield. The lower purchase price means that smaller apartments can make for an affordable entry into the property market, and the lower maintenance costs required can make it even more profitable.

        Read More: What is a good rental yield in 2024? Our expansive guides cover everything you need to know before investing in UK real estate.

        The North West Region Is Forecast to See the UK's Highest Five-Year Capital Growth Rate in 2025 and Beyond!

        Read more about this in our guide to the latest Savill's Residential Property Market Forecast and learn which UK regions to consider for buy to let investment.

        Are Micro-Apartments Greener Investments?

        Energy efficiency and reducing our carbon footprints are big priorities in the property industry currently, and these considerations are bound to get more important as time goes on.

        As evident as it is to point out, less energy is required in a smaller property. Smaller apartments can be heated much easier, meaning lower energy bills and reduced energy use.

        Developers are also Incorporating energy-efficient and eco-friendly features into micro-apartments, further compounding their sustainability.

        Smaller apartments have many benefits for both tenants and landlords and can offer an affordable start to a property investment journey or an attractive asset for diversifying a property portfolio.

        To learn more about the UK property market, check out some of our recent buy-to-let guides:

        Avatar photo
        Author

        Jessica Ferris

        LinkedIn Logo Muck Rack Logo

        Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

        Want to Get in Touch?

        Fill in the form to contact us today and a member of our award-winning property team will be in touch to help.

          It will be my third investment apartment with RW Invest and I cannot recommend them highly enough. Sean Orrett and Chloe Walker really do go the extra mile. Chloe in particular helped me through a particularly hard time with solicitors and all the paperwork that was involved. Living in a different country and negotiating all the nuances that come with investing, she negotiated with ease and gusto. A big thanks to you both.

          Margaret Wiele

          Daniel Stewart, has assisted me every step of the way. This is my first property purchase and so took Daniel up on his offer to guide me through every step no matter how small. I felt comforted to have his assistance in documents I needed to both understand and sign. Couldn't be happier with the help and customer care I have received so far.

          Nathan Saxon

          We highly recommend RW Invest to anyone looking for an experienced, reliable and knowledgeable professional company.
          We are more than delighted with their services throughout the entire process. They provided us with extremely helpful advice and guidance every step of the way and ensured that we understood all aspects involved in securing a property through them.

          Stephanie Chidlow

          Chloe is very helpful. She has been a great help and solved all the difficulties I had with the purchase. I am happy she was there to help with the process. Very approachable and responsible.

          Muhammad Atif

          This was my second unit purchase with RWinvest, and I found the team to be very helpful in finding the best deal which suited my needs and budget. Arjun Surana, Adam Burns were really processional in answering all questions, Excellent follow up and ensures your property purchase are smooth from the start to end and supporting throughout the purchase/exchange of contract process.
          I highly recommend anyone to purchase their property with RWinvest.

          Dhote

          Arrow left
          Arrow right
          Disclaimer Image
          Landlord News, Market & Investment Trends, UK