Londoners are increasingly choosing better transport links and a more central location over square footage, signalling the rise of the ‘micro apartment’ in the UK’s capital.
According to the latest figures from London Central Portfolio, 42 percent of flats let over the past 12 months have been studios and one bedroom units.
It has also been much easier to shift smaller properties, with discounts to asking rents much lower at 5.2 percent and 6.2 percent for studios and one bedroom properties, respectively. In comparison the largest, most expensive flats are recording discounts to asking rent of over 10 percent.
With rents in London becoming increasingly unaffordable for those on a tight budget, smaller properties offer an affordable option for tenants who wish to be centrally located near their place of employment or study. In a similar dynamic to PCL’s sales market, where luxury properties have suffered most in the face of the changing tax landscape and Brexit uncertainty, PCL’s rental market is also notably fragmenting by size and price band.
Naomi Heaton, CEO of LCP, commented on the figures: “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.
“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.”