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2 min read

Why do studio apartments make a good investment?

Why do studio apartments make a good investment?

The UK rental market is busier than ever. Properties of all types are in high demand, especially in the most popular city centre markets like Manchester which are seeing high population growth at the same time as a limited supply of new homes is reaching the market.

In this climate, investors are looking to buy studio apartments in Manchester because they are becoming increasingly sought-after as the perfect option by renters looking for their own space in a crowded city centre. This need has become even stronger since the Covid-19 pandemic, which showed many people the benefits of having their own private space rather than sharing.

Young people in particular are turning to studio apartments as the perfect option. In a city like Manchester, where the population is growing by thousands each year, many young professionals and students from around the world are moving to the city from elsewhere and looking for a home which is comfortable, affordable and located close to everything they need.

Living alone is not seen as a negative thing by young people and students as it once might have been. Instead, they are embracing the additional privacy and sense of convenience that comes with a studio apartment.

 Studio apartments are affordable to rent, and attract younger renters and students

In addition to more affordable rent, younger renters and students are also becoming increasingly fond of studio apartments due to them being cheaper to run. With the growing cost of energy, a home that uses less power is more appealing than ever to renters. The cost of living crisis is unlikely to end anytime soon, with inflation rising on top, and so studio apartments with lower energy bills are seeing increased demand.

Furthermore, the low energy requirements reduce the overall carbon footprint of life in a studio apartment – another factor that is an important consideration for young professionals and students in cities like Manchester.

A significant portion of the extra 70,000 people predicted to move to Manchester by the end of the decade will be young professionals, and the government is planning to double the number of overseas students at UK universities by 2030. Both groups are the prime target audience for studio apartments, and so demand is likely to increase.

Indeed, its current growth is already having an effect on the average rent for studio apartments in Manchester city centre.

The latest Manchester rental market quarterly report from Alliance City Living shows how well the city’s market is performing. The headline figure is that asking rents in Manchester increased again in March 2022, marking 13 consecutive months where this was the case. In the last quarter alone, they have risen by 5.1%.

Looking at studio apartments specifically, the report states that the average monthly rent for this type of property in Manchester has risen to £845. Increases in this average have massively outpaced growth in inflation over the last year, and this is good news for investors looking at studio apartments to buy.

Investors should also be aware that studio apartments are normally available at a significantly lower price than a regular one-bedroom apartment, despite the average rents for both not being too far apart. This means that investing in a studio apartment can give you a higher rental yield in the right circumstances.

Studios offer a unique opportunity to investors in busy markets, and one that should not be missed out on

Want to buy a studio apartment in Manchester? Get in touch with our team today by clicking here.

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Mallam Grant
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Conor Armstrong
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