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The main aim of every UK property investor use to be the bigger the better as far as budget would allow, what we are seeing in central London is tenants choosing location over size, with a rise in the amount of UK property buyers searching for micro-apartments, according to new research.

Statistics from London Central Portfolio (LCP) show there is increased interest in smaller properties which allow tenants to move to central London with the limited budget that they have, for work or study reasons.

This is having an impact on the UK property market in London where luxury properties sales have been affected with Brexit and the change in tax to be paid, the private rental sector also supports these statistics.

During the last year an incredible 42%  of the properties that have been rented out have been studios or one bedroom apartment, as tenants see local amenities like transports links and the local social scene more important than size.

‘From a rental market perspective, a dynamic which was notable during the credit crunch is again apparent as corporates cut their housing budgets. Tenants are now looking for more affordable options, choosing central locations and an easy commute to work or university,’ said Naomi Heaton, chief executive officer of LCP.

‘This is reinforcing the new trend for the globally mobile to seek highly specified micro-apartments, with well optimised space, whilst families tend to opt for more suburban locations where smaller budgets can stretch to larger homes and ideally the possibility of outside space. Indeed, significant discounts to asking rent of over 10% for the most expensive, luxury rentals are now being reported,’ she added.

As far as the central London rental scene is concerned it is a tenants market not a landlord one, as tenants make the most of the surplus of properties to choice from, and landlords uncertainty regarding the current economic climate.

According to LCP. Studio and one bedroom units have recorded discounts to asking rents of 5.2% and 6.2% respectively, which increases by size to 7.8%, 9.9% and 11.2% for two, three and bigger bedroom units respectively.

63.9% of tenants are now singles.

  • 36.6% of properties let have rents less than 500 GBP per week
  • Compared to 3.2% with rents over 2000 GBP per week.
  • 72% of properties let have rents under 750 GBP per week

‘It is very clear that tenants are now looking for smaller units, which offer more affordable prices, but want top quality properties with transport links and amenities on their doorstep. As the popularity of micro-apartments increases, it may perhaps be time for the Government to review their minimum space standards, introduced in 2014 and cater for what the market really demands,’ Heaton pointed out.

‘This will not only offer a more affordable product for London’s working and student population but by optimising the use of small spaces provide a greater volume of housing stock at a time of a critical UK housing crisis, she concluded.

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