Partner, National Head of Lettings
When renting prime properties in high-demand areas like London, many are looking for smaller, more manageable homes these days. Kate Eales, National Head of Lettings, takes a closer look.
For the prime market, space has always been a must have. But things are changing, as many prime renters now look for high-quality micro apartments.
What are micro homes?
With space an ever-growing issue – especially in the UK’s cities – micro homes are becoming big business. These tend to be properties that have less than 37sqms on internal floor space, though studio flats and one-bed apartments often fall under the heading.
In 2016, as many as 7,809 micro-homes were sold – up 172% on 2014.
Meanwhile, an investigation by The Times found the Government issued more than £50m in housebuilding grants for such homes in 2016. Property investment firm London Central Portfolio says that in the last year, 42% of properties let in the capital have been either studios or one-bed dwellings.
Why is the prime market picking up for micro apartments?
While these mini homes might not seem the sort of spaces that those shopping in the prime market might be after, there has been a rise in the number of prime micro apartments being sold.
The beauty of such apartments is that they can be built more centrally than larger ones, squeezed into city blocks or on previously unbuildable land. This allows them to be closer to both offices and transport hubs – ideal for those working in London for a few days a week, but living further out.
Some of the rise in demand has come from the uncertainty over Brexit.
As foreign business people grow edgy over whether they will still be doing business in London post-Brexit, they have become less inclined to invest large sums of money either buying flats or on large deposits for expensive apartments.
In the past, relocation agents have moved whole families to places like London when someone moves for a role. These days, it’s become a lot more common to simply relocate the person taking the role into a one-bed flat. They will then commute to their family at weekends.
With people also looking at their outgoings more these days, there’s also a move towards a better work life balance. People don’t want to be commuting for hours every day – they want everything right now, whether that’s a concierge taking their parcels for them or a gym in their building.
These new developments often offer more than just a concierge service but offer the chance of a more communal interactive experience which is appealing if you are renting in a busy city like London. Features such as dining areas, lounges, work spaces, libraries, bars and cinemas offer the opportunity to meet the neighbours and socialise – which is great if you’re in town on business and your family is living elsewhere.
Tenants of these apartments often want the ability to rent for a shorter period of time so will request to have a break clause after six months to ensure that they have the flexibility to move when needed, which is perfect for those who work for companies with an uncertain future or who might be planning to move abroad.
And investors love them too as they can provide high rental yields. As the use of space is more efficient, it means that they can charge more rent per square foot than with larger properties.
See if there are any micro-apartments for you in London.