Studio Apartments: The rise of independent living
For many years, studio apartments in the UK have been synonymous with dingy bedsits and a single cramped room containing a living area, kitchen and bedroom in one, often with shared toilet and bathroom facilities. But in the modern property landscape, this could not be further from the truth. Nowadays, studio apartments are light, bright, airy and spacious, a far cry from the cramped apartments of the past, and offer a good deal more for your money in a time of rising unaffordability for homeownership. Where buyers are struggling to compete for notoriously expensive one or two-bedroom family homes, studio apartments are the perfect entry-level purchase to get your foot on the ladder.
However, this does not mean that buyers are purchasing a sub-standard property—on the contrary, many developments now contain high-end studio apartments that come with all the trappings of luxury living, including balconies, high-spec fixtures and furnishings and allocated parking. Such is the success of studio apartments that this is not just a UK trend—the Japanese are particularly fond of this property type, even going so far as to call them ‘one-man mansions’. This perfectly translates to the properties that are appearing on the market, with most studio apartments in new-build properties meticulously designed to capitalise on space without surrendering comfort.
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Studio apartments are now shaking off their stigma to become one of the most sought-after property types currently on the market. Tenants in particular are enamoured with the sense of independent living offered by studio apartments, without having to pay the premium for a one-bed apartment. And because of this skyrocketing tenant popularity, more and more investors are sitting up and paying attention to this market-wide trend, looking to provide highly sought-after studio apartments to the undersupplied rental market.
Investors also benefit from cheaper upfront costs from purchasing a studio, whilst at the same time can still benefit from similar (if not better) yields than those offered by one or two-bed apartments in the same development. Furthermore, studio apartments also enjoy lower service fees on average compared to their multiple-bedroom counterparts. To put this in monetary terms, an investment company in Manchester has commented that studio apartments can achieve gross yields of up to 8%, while one-bedroom apartments are generally fixed around the 6-7% mark. Also, when considering that entry prices are considerably lower on studio apartments, it is easy to see why studio apartments have taken the market by storm.
Taking inspiration from Manhattan-style apartments, studios are leading the market, with tenants of all tenures and budgets looking towards the sense of independent living that studio apartments offer. Such is the popularity of studio apartments that now even students are actively seeking high-end studios rather than halls of residence or the more traditional ‘cluster flats’ that have long since dominated the student accommodation landscape.
However, it is not just students, tenants and investors that can see the benefit of studio living—a new trend is now emerging that parents are increasingly purchasing studio apartments for their children. This is particularly true in the student investment market, whereby the parents use a luxury studio apartment as an ongoing investment throughout their child’s university education (and continue to rent out the apartment to other students after their child has graduated), but more and more parents are now also purchasing studio apartments for their offspring to live in full-time after university.
Studio apartments are all things to all people— Tenants love the sense of independent living offered by studio apartments, investors are enamoured with the high yields offered, and parents like the low purchase prices to allow their child to get a foot onto the property ladder (with the market in this day and age known for being notoriously hard to penetrate). No matter the reason for purchasing a studio apartment, the fact is that these apartment types are in high demand from young professionals, students, institutional investors and parents alike, all keen to take advantage of the lower prices but high specification that studio apartments offer.