Why Invest in A Studio Apartment: Complete Guide (2024) - RWinvest Skip to content

Why Invest in a Studio Apartment?

Want to learn about studio apartments and why they’re such a popular buy to let investment option in the UK? Read our guide to studio flats offering information on everything you need to know!

    The Ultimate Guide to Investing in Studio Apartments in the UK

    Studio apartments are a new and innovative addition to the UK property market. They appeal to a growing number of renters who want a stylish and compact living space in a great location, which makes them an attractive option for investors.

    But should you buy a studio flat in the UK? If you’ve considered investing in studio apartments, you may have a few questions before you go forward. If you’re wondering, ‘What is a studio flat in the UK?’, ‘What does a studio apartment look like?’, and ‘Why should you consider investing in a studio apartment in the UK?’, make sure you read our detailed guide.

    Keep scrolling to learn more about why you should invest in a studio flat and how to do so successfully.

    What will I find in this guide?

    • An FAQs section covering questions like ‘What is a studio apartment?’ and ‘Is it a good idea to buy a studio flat?’.
    • Information on the benefits of investing in studio apartments.
    • Tips on how to make a lucrative studio investment.
    • Details of the best studio apartments currently available for investment.

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      Studio Flat Definition and FAQs About Studio Apartments

      Wondering ‘what is a studio apartment?’ and feeling unsure whether buying a studio flat is for you? Here are some FAQs to help you learn more about studio apartments.

      So what is a studio flat? Often referred to as an efficiency apartment or bachelor apartment, a studio apartment, by definition, is a self-contained living space where the bedroom, living room, dining area, kitchen area or kitchenette are all within the same room.

      The floorplan of studio flats can differ. For example, some studio apartments contain divider walls that separate the studio bedroom/sleeping area from the rest of the flat to offer some privacy. Many studio flats, however, are just one room without separate areas.

      Once you know the definition of a studio flat, it’s essential to understand the difference between a studio and a flat.

      The main difference between a studio and a flat is the floor plan, with a studio being contained to one space while a one-bedroom apartment is made up of different rooms.

      There are no separate rooms in a studio flat, meaning that each of the key living areas of a home, aside from the bathroom, are located within one space.

      For instance, one corner of the space may be a living area, while another corner, considered the studio bedroom, contains the bed.

      In a one-bedroom apartment, every room in the home is separated by walls, with a separate bedroom, separate bathroom and separate living area.

      The only exception is that sometimes a one-bedroom apartment may not have an entirely separate kitchen, with the kitchen and living area merging into one.

      If you’re an investor looking for their next property purchase, buying a studio flat is undoubtedly a good option. Studio apartments offer investors lower purchase prices and overall lower costs, high demand from certain tenant groups, and potentially high rental yields.

      Studio flats are best suited to one person living alone or a couple. This is because studio apartments typically just have one bed. As a result, studio apartments are most common with students or young professional renters looking for a stylish and compact place to live.

      Studio apartments can occasionally be slightly more difficult to sell than one or two-bedroom apartments, depending on the area and real estate market at the time. However, those who buy studio flats in thriving locations that see a lot of demand for studio apartments will not struggle to sell their property.

      There are many reasons why people buy studio apartments. For investors, studio flats are an in-demand form of rental accommodation that offers a lucrative return on investment. For homeowners, studio flats are affordable for many young people to get on the property ladder.

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      The Benefits of Investing in Studio Apartments

      So now that you know more about studio flats and what a studio apartment is, let’s discuss some of the benefits of investing in studio apartments. Studio flats are one of the most popular investment types in the UK, and here’s why.

      There’s a Growing Demand For Small Studio Apartments

      Cities are growing, populations are increasing, and more people are living alone. Because of this, apartment living is on the rise, and the demand for studio apartments is growing.

      The number of UK renters is growing, with a fifth of UK households now in private rented accommodation. Now, the top tenant groups renting properties are students and young professionals.

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      Student Studio Apartment

      Studio Flats are Ideal For Young People

      Living in a studio flat in the UK, particularly within the city centre, is the perfect option for young people who have just moved to a new city and want an affordable, comfortable, and well-located place to live.

      With student tenants, studio flats provide a level of privacy that they might not get from shared student accommodation such as a student house.

      Research shows that students in the UK are becoming more interested in renting self-contained student accommodation, and studios are the perfect mixture of independent city life and affordability.

      For many, living alone is no longer seen as a negative thing, and many young professionals embrace having their own space when searching for apartments to rent.

      For people living solo, studio-type apartments and micro-apartments in the UK are far more convenient and comfortable than a larger house or flat. However, even 1-bedroom apartments can be too large for someone living alone.

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        Gateway Studio Kitchen

        Small studio apartments are also perfect for older tenants. A growing number of older people are downsizing into a convenient all-in-one apartment after selling their family home.

        Living in a studio flat with an open-plan layout can be the perfect residential unit for older adults struggling with mobility.

        They are also far easier to keep clean and tidy and to carry out home improvement tasks.

        The landlord or property management company behind a rental studio flat is also often responsible for maintenance. Many older people are now looking for a studio apartment to rent because of the ease, comfort, and accessibility they provide.

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        They’re More Affordable and Come With High Yields

        Studio apartments are more affordable than one or two-bedroom flats, both for the investor and the person living in a studio flat in the UK.

        This is because they’re smaller than most other apartments, with sizes typically ranging from around 400-500 sq ft.

        However, while the purchase costs and rental costs for a studio-type apartment may be lower than the average cost of a one-bedroom flat, this doesn’t mean that small studio apartments can’t still generate some attractive rental returns.

        For those who aren’t familiar with rental yields, they’re a percentage figure calculated by taking the purchase price of a property and its rental income.

        The higher your rental yield, the better the return on investment you can expect. Since studio flats still have high rental costs depending on the area and the apartment itself, rental returns are potentially very attractive with studio flat investments.

        Take our latest student investment opportunity, Shaw Street. These city-centre-based studio apartments are priced from just £69,995 and offer huge 8% rental yields.

        Rents in the UK are predicted to rise over the coming years, having experienced huge growth over the last five years. In the North West region alone, rental prices have increased by an average of 15.2% since 2016.

        Consequently, investors have seen growth in rental rates and capital appreciation, with a growing market for studios.

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          They’re More Eco-Friendly

          One other benefit of investing in a studio apartment, especially in 2024, is that they’re more environmentally friendly than some other property types.

          Because studio flats fit into a small apartment size, they require less energy to be adequately heated or cooled. With studio apartments, there’s also no chance of leaving the lighting on in multiple rooms at once, which saves on electricity usage.

          At a time when more and more tenants are classing eco-friendly features as one of their most important rental requirements, offering a property that meets these criteria is a great idea.

          New eco-friendly property developments are launching around the UK to cater to this growing demand for eco-property. ELEMENT – The Quarter, for instance, offers studio flats in a unique eco-friendly development that features carbon-neutral technology.

          Not only does investing in an eco-friendly studio flat attract more rental demand, but it will also lower your own carbon footprint in the process!

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          How to Buy a Studio Flat - A Guide to Buying a Studio Apartment

          When buying a studio apartment as an investment, there are many things you should look for before you go ahead with the purchase. Here are five steps that you should keep in mind before investing in a studio apartment.

          1. Understand the Basics

          What is a studio flat? What is a studio room plan like? And why invest in a studio apartment when you could buy a one or two-bedroom flat?

          If you don’t understand all of the basics of studio apartments, you’re limiting your success.

          Before you think about buying a studio flat, make sure you know everything there is to know about investing in a studio flat, meaning what studios look like, what makes them different from an apartment, and their benefits.

          2. Search for Studios in the Best Locations

          Make sure you’re looking to invest in a studio apartment in a desirable location, such as within the city centre, if you want to attract a young professional or student crowd.

          Ensure that you’re able to generate a high level of capital growth from your studio apartment. This means investing in an area known to have a strong property market with high predictions for house price growth.

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            What are the Best Locations to Invest in a Studio Apartment? 

            As cities across the UK grow and expand, city centre space is coming in at a premium. With a historic shortage of housing in the UK, studios are providing a compact solution to the lack of housing available.

            Small studio apartments typically allow investors to purchase property in popular city-centre locations for a reduced cost, with increasing rental rates, too.

            Developers are integrating studios into their new developments across the board. The demand for studios is clear, with studios selling out quickly as investors make the most of the opportunity to invest in such thriving locations.

            For this reason, the studio flats Manchester and Liverpool have to offer present a perfect investment opportunity.

            In places like Manchester and Liverpool, where property prices are rising rapidly, this type of apartment will allow investors to purchase in high-value areas.

            The choice of studio apartments that Liverpool and Manchester offer make a great option for your next property venture, allowing you to benefit from high returns and increased growth.

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              Liverpool Studio Apartments 

              Buying a Liverpool studio flat is a perfect option for investors who want to generate high returns, attract a steady stream of demand, and boost their chances of capital growth.

              Liverpool city centre is an area that sees a lot of demand from tenants. It’s perfect for those who want to rent a property near their workplace or university and don’t want to spend a lot of money.

              Liverpool rental costs have risen over the years and are expected to continue growing, which is good news for property investors looking to maximise their rental income.

              Studio apartments in Liverpool city centre are the ideal solution for cost-conscious tenants as they’re comfortable, affordable, and well-located.

              The city also offers Manhattan studio apartments, which is the latest property market trend for tenants and investors.

              Average rental yields in Liverpool exceed 5%, with certain postcodes capable of generating rental returns of up to 10%.

              Many parts of Liverpool also see huge growth thanks to regeneration projects throughout the city centre.

              Therefore, purchasing the residential or student studio flats, Liverpool has to offer is a smart investment decision for those focused on the capital appreciation and rental returns.

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              Manchester Studio Apartments 

              Manchester is another top UK investment hotspot and an equally lucrative city for investing in studio apartments.

              The studio apartments Manchester has to offer are often based within the city centre due to the demand this area sees.

              Many young professionals and students seek cheap studio flats in Manchester as they want to live right in the middle of Manchester’s hustle and bustle without forking out massive amounts for rent.

              In June 2023, the average rent in Manchester city centre was £1,605 per calendar month, so studio flats in Manchester provide tenants often a cheaper alternative, which is often just as appealing as a one or two-bedroom apartment.

              Manchester has similar rental yields to Liverpool, with an average yield of over 5%, and boasts house price growth predictions of 20.2% by 2027 – an increase predicted for the whole North West region.

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                3. Select the Right Studio Flat

                When searching for the perfect studio apartment, you need to pay attention to the space itself and make sure it’s well-designed, not too cramped, and practical.

                So what is a studio flat supposed to look like exactly? Some of the main things you should pay attention to are space and layout.

                While a studio apartment is typically defined as a smaller space than a one or two-bedroom flat, this doesn’t mean that a studio flat shouldn’t still offer a comfortable living experience.

                Think about whether you would be happy to live in the studio flat you’re considering buying. If you wouldn’t, due to the space being too cramped, what makes you think your tenant would?

                You should also make sure that the design and decor of the property are up to a high standard, as this will attract more tenant interest and mean you won’t have to worry about refurbishments.

                When targeting specific tenant groups like students, it’s also a good idea to think about looking for studio flats with features such as a dedicated study area.

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                  4. Think About Your Returns

                  With every buy-to-let investment, it’s crucial to think about your potential returns before purchasing the property. So don’t forget to factor this into your investment process when buying a studio flat.

                  If you’re wondering, ‘what is a studio apartment rental return supposed to be?’, the ideal yield ranges from around 5 to 10% in certain areas. Investing in a studio flat in a city like Liverpool is a good idea due to the high yields and strong capital growth on offer.

                  This figure may be included within the property listing, or you might need to work out the rental yields yourself.

                  If a studio apartment doesn’t offer high enough yields or capital growth predictions to generate strong returns, it’s a good idea to continue your property search until you find a studio flat investment that ticks all the boxes.

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                    UK Studio Apartments For Sale - Explore Our Studio Flats to Buy

                    Looking to buy a studio apartment in the UK for your next investment purchase? We have a range of exciting investment opportunities currently available, with properties based in high-growth UK areas offering rental yields of up to 8%.

                    Shaw Street – Liverpool Student Studio Flats

                    Prices From £69,995 

                    Assured 8% Rental Yields 

                    Completed and Tenanted Property 

                    These completed and tenanted student flats based in Liverpool are a must for anyone considering a studio apartment investment. With prices from just £69,995 and rental yields of 8%, Shaw Street is one of our most in-demand studio investments right now.

                    While not technically a studio apartment, Shaw Street functions more as an en-suite flat where residents have their own private bedroom and bathroom but share a kitchen with other tenants. This is a popular style of student accommodation in the UK.

                    Ideally located in Liverpool city centre, Shaw Street provides the perfect location for students living in Liverpool to access everything the city offers while also being within walking distance to several university campuses.

                    ELEMENT – The Quarter

                    Prices From £74,950 

                    Assured 8% Rental Yields 

                    Off-Plan Investment  

                    ELEMENT – The Quarter is one of our most exciting investment opportunities of recent years. This development offers a mix of different unit types, including stylish studio apartments.

                    As the first eco-development in Liverpool, this property investment venture is unmissable if you’re looking for a one-of-a-kind buy to let studio flat. Technology like rainwater recycling and heat recycling systems, amongst other forward-thinking technologies, ensure this development is sustainable.

                    Amazing onsite facilities, including an onsite gym, games room, and a dedicated remote working area, ensure that studio flats in this property will see a lot of tenant demand.

                    With an unbeatable location right in the hustle and bustle of the thriving Liverpool Knowledge Quarter, and prices from just £74,950, this is an all-around fantastic investment opportunity for anyone looking for cheap studio flats for sale in the UK.

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                    Now that you know the answer to “What is a studio flat in the UK?” and the definition of a studio apartment, you’re hopefully a lot more informed on the potential behind investing in studio apartments.

                    But is it worth buying a studio apartment? Well, if you’re an investor, it’s definitely worth buying a studio apartment. This is because studio apartments are affordable and able to generate a large return on investment.

                    With so much demand for city-centre apartments, a stylish and modern studio apartment in the city centre offers a desirable investment option that will attract a range of tenants.

                    Now is the perfect time to invest in studios. With such huge demand for these streamlined, compact living spaces along with higher affordability, studio apartments are perfect for a first-time investment.

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                    Enquire With Us Today 

                    With fantastic city-centre locations, high-end designs, and proven appeal, studio apartments available with RWinvest can offer a potentially lucrative investment opportunity.

                    Our low-cost, easy to manage spaces are a reliable way to start out in property investment or to build up your existing buy-to-let portfolio.

                    If you’re still seeking information about studio apartments or you’re interested in taking the next step to invest in a studio flat, be sure to get in touch, and we can help you find the perfect opportunity. Chat with us via our live chat service, contact us directly, or request a call back for more information.

                    If you’ve enjoyed our studio apartments guide answering ‘What is a studio apartment?’ and offering advice on buying a student flat for investment, take a look at our other buy-to-let investing guides containing some helpful tips and advice. Head to our buy-to-let news section to find lots of related articles.

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                    Reece Pape

                    Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.

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