One Bedroom Apartments Popular With Investors

The demand for one bedroom apartments in the UK accelerated substantially in September.

The latest Landbay Rental Index shows that the cost of renting a one bed apartments increased by 3.9% year-on-year, reaching an average £1,054 per month.

High demand from renters

The report states that demand from recent graduates, young professionals and couples has helped push the demand for property of this type of rental property.

‘The upward trend in UK rents can simply be explained with one word, jobs. The UK’s job market is going from strength to strength and the rental market is staying hot on its heels,’ said John Goodall, chief executive officer of Landbay.

‘The sharp seasonal jump in rental growth for one beds reflects a buoyant graduate job market as people move to their first job. Flexibility and freedom is the order of the day for first jobbers, and one bedroom flats offer the perfect springboard to take the plunge into full-time working life. One bed flats are also popular for couples and young professionals who don’t want to flat share,’ Goodall added.

Capital gains potential

According to the latest Halifax House Price Index, over the last decade the price of apartments in the UK has risen faster than the price of houses.

On average, the price of apartments has increased by 60% over the last 10 years whereas the price of houses only increased by 34%.

With the price of apartments rising faster than houses, an apartment in the UK may offer property investors a stronger chance to make a profit when it is sold back on the market.

Demand from buyers

From first-time buyers to buy-to-let investors, one bedroom apartments are a popular choice and therefore demand for this type of property is high.

Despite the demand, not many apartments are sold. According to the Halifax House Price Index, in 2005, 20% of all properties sold were apartments. Fast forward to 2015, this number has dropped to 17%.

This shortage may be caused by landlords holding onto their one bedroom property investments.

London-based property specialist Experience Invest has a range of 1 bed property investments in key UK town and city centres.

‘Experience Invest has a selection off plan residential property investments in some of the UK’s highest yielding towns and cities. We have seen a strong investor demand for 1 bed properties which will have a great appeal to their respective rental markets upon completion,’ a spokesperson from Experience Invest commented.

Residential buy-to-let investments such as one bedroom apartments are a versatile choice for property investors and can generate strong returns as a part of an investment portfolio.