18 Oct by Amy Jackson

Why Invest in a Studio Apartment

The Benefits of Studio Apartments

What is a Studio Apartment?

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 space in a great location, which makes them an appealing option for investors. So what exactly is a studio apartment? What does a studio apartment look like? And why should you consider investing in a studio apartment in the UK?

So what is a studio apartment? The term studio flat refers to a self-contained living space where the bedroom, living room, dining area and kitchen are all in the same room. A studio apartment to rent can also be called a bachelor apartment, studio flat, or efficiency apartment.

 

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Commonly asked Questions about Studio Apartments

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What is considered a Studio Apartment?

So we know the definition of a studio apartment, but what is considered a studio apartment? If a property has an open plan design where the living room, kitchen, bedroom, and dining area are located within the same space and not separated into different rooms, this is the perfect studio flat definition. This type of apartment usually has a separate bathroom, while some studio flats might have a separate bedroom or a separate kitchen, but this is rare.

According to London’s planning guidance, the minimum size for a studio flat in the UK is 398.265 square feet, but ‘micro’ studio apartments can be as small as 139.931 square feet.

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Why are Studio Flats growing in Popularity?

Popular around the world, from tiny apartments in New York to living pods in Japan to Scandinavian minimalist lodges, smaller living spaces are coming to the UK. Cities are growing, populations are increasing, and more people are living alone. Because of this, the demand for studio apartments is growing. The difference between studio and one-bedroom apartments typically means higher affordability, increased profits, better locations and stronger tenant demand.

The number of UK renters is on the rise, with a fifth of UK households now in private rented accommodation. More people are moving to the city, and there is a severe shortage of available apartments for rent, with demand outstripping supply. For single people or even couples who want a more affordable place to rent in the city, studio apartments are a great option.

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Who is Looking For a Studio Apartment?

The tenant group who tends to be interested in renting a studio apartment consists of young people. There has been a surge in the number of young people who are looking for a studio apartment to rent. Since the main tenant group in the UK seeking a city-centre apartment tends to be young professionals, studio flats are perfect for young renters who are willing to sacrifice space for a premium location.

Living alone is no longer seen as a curse, and many young professionals embrace having their own space when searching for apartments for rent. For people living solo, micro-apartments in the UK are far more convenient and comfortable than a larger house.

Alongside young professionals, students are also a big target market for UK studio flats. Student studio apartments are a great investment solution for students who favour living alone rather than in shared accommodation. The cost of rent is also often lower in a studio apartment meaning they’re ideal for budgeting students.

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What are the Benefits of Studio Apartments

Student accommodation is one of the most robust and thriving sectors of the UK property market. Recently, an increasing number of students are opting for high-end purpose-built student accommodation (PBSA). Investment in student housing was up to £4 billion in 2017, an impressive 25% above the previous year. Luxurious hotel-style suites with a private kitchen, shower room and front door give students more privacy. Workrooms, gyms, cinemas and 24-hour receptions all contribute to a luxury student experience. The UK has seen an enormous increase in students, with cities like Liverpool, Manchester and Cardiff becoming hotspots for PBSA.

Studio apartments are also perfect for older tenants. A growing number of older people are downsizing into a convenient all in one apartment, selling their family home. A studio apartment plan layout can be the perfect residential unit for older people struggling with mobility. They are also far easier to keep clean and tidy, carry out home improvement tasks, and the landlord or property management company is 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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Why Invest in a Studio Apartment?

Micro apartments in the UK have been increasingly popular with investors as well as residents. These easy to manage, self-contained spaces are more affordable than other apartments and they also offer significantly higher yields. Studios can also offer an excellent opportunity for experienced investors to diversify their portfolios. Investors can purchase a number of studio apartments across various locations to maximise their rental yields and benefit from capital appreciation. Rents in the UK are predicted to rise for the next five years, with a 15% rise in rental income. Consequently, investors are seeing growth in both rental rates and capital appreciation, with a growing market for studios.

Some investors are put off by the smaller spaces that come with studio apartments, but there’s actually a growing appeal for this type of property. A more streamlined, multifunctional space can be an attractive prospect for tenants thanks to the recent trend for simpler living, as minimalist spaces and sustainable living has added to the growing popularity of studio apartments. Because of the ‘tiny homes’ style of studio apartments, there’s less need for multiple pieces of furniture, keeping costs low and homes less cluttered.

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The Rise of Compact Living

Student studio apartments are a great investment solution for students who favour living alone rather than in shared accommodation.

The design, quality and use of space in studio apartments are all improving. The rise of technology has also helped with the move toward efficient living. People no longer need to own huge book, CD and DVD collections. Everything is now accessible on a tiny laptop or smartphone. Modern studio design features clever solutions, like multi-purpose furniture, room dividers, hidden cupboards and elevated beds. Studio apartments can also be better for the environment, with lower fuel use and additional energy efficiency measures. These measures have been proven to increase tenant appeal as well as the value of the property, with many people factoring these qualities into their apartment hunting journey. Open plan apartment living is as popular as ever and perfect for modern, busy lifestyles.

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Make your first Studio Property Investment

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 investment. These low-cost, easy to manage spaces are a reliable way to start out in property investment. With fantastic city-centre locations, high-end designs, and proven appeal, our studio apartments are an ideal investment opportunity.

Now that you know the answer to what is a studio apartment and the definition of a studio flat, you’re hopefully a lot more informed on the potential behind investing in studio apartments. If you’re interested in taking the next step to invest in a studio flat, be sure to contact us and we can help you find the perfect opportunity. Or, to find out more about buy to let investment as a whole, take a look at our buy to let buying guide containing some helpful tips and advice, and our buy to let news section with lots of related articles.

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Compact living will not appeal to everyone, but for me, there is a beauty to be had in an efficient use of energy and space. There’s a pleasure in being able to live comfortably in a sufficient space, constructed almost entirely from sustainably sourced materials.

Dr Mike Page, Psychologist at the University of Hertfordshire

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