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. The difference between studio and one bedroom apartment is often higher returns and greater tenant demand.

What is a Studio Apartment?

The studio apartment definition is that it is self-contained living space. What’s a studio apartment? One where the bedroom, living room, dining area and kitchen are all in the same room. 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 difference between studio and one bedroom apartment can be increased profits, better locations and a stronger tenant demand. A studio apartment to rent can also be called a bachelor apartment, studio flat or efficiency apartment.

Studio Apartment image Comparing studio with one and two bedroom apartments

A Growing Market

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 rental accommodation available, with demand outstripping supply. 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.

Ideal Locations

As cities across the UK grow and expand, city centre land 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. Developers are building upwards rather than outwards, with more skyscrapers than ever before transforming the city’s skyline. Subsequently, these new high rises are delivering the perfect place for studio living. Small studio apartments 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, RW Invest has completed 26 sites over 16 different cities, all of which contained studio apartments. The demand for studios is clear, with studios selling out quickly as investors make the most of the opportunity to invest in such good locations. In places like Manchester where property prices are rising rapidly, studios allow investors to purchase in high-value areas. One stunning example is Caxton Hall, where a studio apartment Manchester offers staggering rental yields of 9% guaranteed for two years.

Who is Looking For a Studio Apartment?

There has been a surge in the number of young people who are looking for a studio apartment to rent. 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. For people living solo, a small studio apartment is far more convenient and comfortable than a larger house.

Caxton Hall Manchester Student Studio Apartments High Rental Yields Infographic

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. An open plan single storey layout can be the perfect living solution for older people struggling with mobility. They are also far easier to keep clean and tidy 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.

Why Invest in a Studio Apartment?

Studios 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.

#47 Leicester Studio Apartment

Student Accommodation Opportunities

Studio apartments are also perfect for student accommodation, with an increasing demand for self-contained spaces in student developments. Student accommodation is one of the most robust and thriving sectors of the UK property market. With rising tuition fees for British students and higher costs for overseas students, extra spending on housing is more common. 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. It seems that fridge fighting and broken bathroom locks are a thing of the past. 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. A studio apartment Manchester can be a great investment, with its huge student population, growing economy and high student retention rates.

Streamlined Living

Smaller space doesn’t have to be a bad thing either. A more streamlined, multifunctional space can also be an attractive prospect for tenants. The recent trend for simpler living, minimalist spaces and sustainable living has added to the growing popularity of studio apartments.

Dr Mike Page, an engineer and psychologist at the University of Hertfordshire, said to the BBC,

“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.”

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. Open plan living is as popular as ever, perfect for modern, busy lifestyles. Large windows, intelligent design and stunning city views make studio apartments seem far bigger than they are.

Student Studio Apartment vs One and Two Bedroom Apartment Image

Studio vs Apartment

There are also practical benefits to investing in a studio vs apartment with a separate bedroom. They can be easier to keep clean and tidy, and redecoration or maintenance is much quicker. If your investment property needs updating or furnishing, costs are far lower in a small studio apartment. There is also a considerable difference between studio and one bedroom apartment maintenance costs. When it comes to studio vs apartment, on the whole, studios continue to offer better returns for investors. Liverpool’s Fabric District Residence is an excellent example of stylish studio and micro-apartments, where high-end design maximises space. Investors can profit from an impressive 8% net rental return, and apartments are available from just £75,950.

The Perfect Time to Invest in Studios

Now is the perfect time to invest in studios, with such huge demand for these streamlined, compact living spaces. 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 great city centre locations, high-end design and proven appeal, our studio apartments are an ideal investment opportunity.

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