Is Investing in Studio Apartments in the UK Worth It in 2025?
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Renters who appreciate trendy, reasonably priced housing in energetic city centres are finding growing popularity in studio flats.
This trend is a great opportunity for investors to make good gains and earn steady rental income over time.
In this piece, I will explain why studio apartments are a good option and how you can include them in your property investments
Here’s what we’ll cover:
- Clear answers to common questions, like ‘How big are studio apartments?’ and ‘How much rental income can a Studio Apartment generate?
- Top Reasons why studio apartments are a smart investment choice.
- Practical tips to maximise your returns.
- An overview of the best UK cities to invest in studio apartments, including hotspots like Manchester, Liverpool, and Nottingham.
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What is a Studio Apartment?
A studio apartment is a self-contained living space where the bedroom, living area, and kitchen are combined into one open-plan room, with a separate bathroom.
These apartments are designed to maximise efficiency in a compact layout.
Typically, studio apartments range from 300 to 1,000 sq ft, but the most common sizes are between 400 and 600 sq ft, ideal for singles or couples who don’t need much space.
A 450 square foot studio apartment might have, for instance, one open space with a kitchenette, living/sleeping area and small bathroom.
One of a studio apartment’s main draw is its simplicity. They cost less to heat, are simpler to maintain, and call for little furniture given fewer rooms.
For renters, especially young professionals and students, these features—combined with affordable rent and central locations—make studios an attractive housing option.
This consistent demand ensures that studio apartments remain a reliable choice for property investors.
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How Does a Studio Apartment Differ from a 1-bedroom Apartment?
A studio apartment and a 1-bedroom apartment differ primarily from each other in layout.
- With just the bathroom separating the bedroom, kitchen and living area in an open-plan design, a studio apartment Usually spanning 300–600 square feet, these areas are ideal for renters that value simplicity and economy. For example, a studio flat would combine everything into one room, offering modern and efficient living.
- 1-Bedroom Apartment: A separate bedroom and more defined spaces for living and dining. These flats usually have more storage and range from 500–800 sq ft. While they provide more privacy, they often come with higher purchase or rental costs compared to studios.
Here’s a quick comparison table between a studio apartment and a 1-bedroom apartment:
| Feature | Studio Apartment | 1-Bedroom Apartment |
|---|---|---|
| Layout | Open-plan; bedroom, kitchen, and living area combined | Separate bedroom, defined living and dining areas |
| Size | 300–600 sq ft | 500–800 sq ft |
| Privacy | Less privacy due to open layout | More privacy with separate rooms |
| Storage Space | Limited storage | More storage options |
| Cost | Generally lower rent or purchase price | Higher rent or purchase price |
| Maintenance | Easier and cheaper to maintain | Requires more upkeep |
| Tenant Appeal | Ideal for singles, minimalists, and budget-conscious renters | Suitable for couples, professionals, and those needing more space |
| Investment Perspective | Lower maintenance, high demand in urban areas | Higher rental yield potential attracts long-term tenants |
For property investors, the compact size of studios means lower maintenance, while their open layout appeals to tenants looking for practical and stylish living spaces.
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Why Are Studio Apartments Popular in the UK?
Particularly in locations like Manchester, Liverpool, and Nottingham, studio flats have lately been a first choice for tenants all throughout the United Kingdom. Here’s the reasoning:
Affordability
Cheaper to buy and rent, studio flats provide a reasonable entrance for tenants and investors. In 2022, the average price for property in the UK was £175,000, making buy-to-let houses very popular.
Flexibility
The open-plan layout of studio flats makes them easy to decorate and customise. Their compact size also makes them energy efficient, resulting in lower heating and electricity bills, which is appealing to environmentally conscious tenants.
Location Benefits
Studio apartments offer affordable living in prime locations, attracting tenants seeking convenience. In Liverpool’s L1 and Nottingham city centre, demand is high among students and professionals. For investors, strong demand ensures low vacancies and steady rental income.
Angel Gardens
Angel Gardens is located in an up-and-coming district of Liverpool. It is in close proximity to two major regeneration projects: the £150 million Project Jennifer and the £5.1 billion Liverpool Waters scheme.
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Why Do Studio Apartments Make Good Investments?
Studio flats are popular among property buyers, and it’s easy to understand why. Their low price, high rental demand and easy maintenance make them a reliable and profitable option.
Here are the key reasons why studio flats are good for investment:
Lower Entry Costs
Studio apartments usually cost less than larger apartments, which makes them easier for new buyers to buy. You can find studio flats for sale in Liverpool beginning at £74,950. If the house costs less than £125,000, you won’t have to pay stamp duty. This is a great benefit for first-time buyers.
High Rental Yields
Studio flats yield 5–10%, with cities like Manchester, Nottingham, and Sheffield excelling due to strong demand from students and professionals. With demand rising by 71%, studio apartments started to appeal to more than one-bedroom homes in 2022. With an average rent outside of London of £1,162 per month, studios clearly are a wise investment.
Long-Term Demand
Studio apartments remain popular as more individuals migrate to cities and single-person households abound. In places like Sheffield, where new development projects are improving the local economy, studio flats are in high demand, making them a safe investment.
Eco-Friendly and Low Maintenance
With smaller spaces, studios are cheaper to heat and maintain, which makes them attractive to eco-conscious tenants. This also implies reduced running expenses and repair costs as an investor, thereby assuring more profit stays in your hand.
Pro Tip: Before making a commitment, project your possible income with a rental yield calculator. This tool provides your prospective rental yields and cash flow, thereby clarifying the profitability of your investment.
Rental Yield Calculator
What Should You Consider Before Investing in Studio Apartments?
Investing in studio apartments can be highly lucrative, but success hinges on careful evaluation. Here’s what you need to keep in mind:
Location
The location of your studio apartment is crucial. Focus on cities with strong tenant demand and rising rental prices, such as Manchester, Liverpool, Nottingham, and Sheffield. According to the Office for National Statistics, the average UK private rents increased by 8.7% in the 12 months to May 2024. In England, the average rent hit £1,301, while Northern Ireland saw a sharp 10.3% rise in rents in the 12 months to March 2024.
Design and Layout
A well-designed studio apartment can draw in more renters and charge higher prices. Focus on units that have good designs, plenty of natural light, and high-quality finishes. For example, studio apartments in places like Liverpool and Manchester that are being improved, and have modern features and smart storage options, are very popular with workers and students.
Tenant Demographics
Studio flats are often popular with students, young workers, and couples who want to save money and live easily. Average rents in England have gone up by 8.6% to £1,301, so more people are looking for smaller, affordable places in central areas. In Nottingham, many students create a constant need for studio flats. In Manchester, workers prefer city-center homes that are near their jobs.
Financial Goals
Assess your potential rental income and capital growth before investing. Studio apartments often deliver rental yields of 5–10%, depending on the area. Average salaries in Scotland have increased by 9.3% to £957, attracting investors to places like Glasgow and Edinburgh. These tips will help you make better choices and improve your profits from investing in a studio apartment.
Best UK Cities to Invest in Studio Apartments
Studio flats are doing well in many big towns in the UK, offering interesting opportunities for investment. Let’s explore why Liverpool, Manchester, Nottingham, and Sheffield are great places to invest in studio flats:
- Liverpool
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- Liverpool
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- Liverpool
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Up to 10% in central Liverpool
Properties start from £74,950
5.2% growth in 2024
Rents up 9.7% annually
£1B Knowledge Quarter
Universities drive rental demand
- Manchester
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- Manchester
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Studio apartments offer 5% returns
Increased 11.3%, reaching £1,291
£256,000 average house price
71.4% employment rate rise
74,000+ university students
Strong growth, consistent returns
- Nottingham
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- Nottingham
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- Nottingham
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Offers 6–8% returns for investors
£200K average ensures good value
Prices rose by 1.6% annually
Rents increased to £944 monthly
Over 65,000 ensure rental stability
Strong demand for studio flats
- Sheffield
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- Sheffield
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High rental yields of 5–8% for studios
Strong demand from 59,000+ university students
Affordable property prices averaging £224,000
Steady 2.1% year-on-year price growth
Regeneration projects enhancing investment appeal
Prime locations near universities and centre
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Why Now Is the Time to Invest in Studio Apartments
In 2025, studio apartments are a viable investment as more people move to cities. Liverpool studio flats cost £74,950, while Nottingham’s average house price in November 2024 was £200,000. Prices in Manchester are predicted to jump 28%. These dwelling types are safe and profitable investments.
Increasing Demand for Rentals
Young professionals and students are driving demand for rental properties in places like Liverpool, Manchester and Sheffield, driving up rental income and the number of occupied properties.
Affordable & Profitable
Studios are cost-effective to buy and maintain, offering investors high rental returns and strong capital growth in key UK cities.
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Conclusion: Are Studio Apartments a Good Investment?
Studio apartments offer affordability, high rental yields, and long-term growth potential. With steady demand from tenants in key cities, they are ideal for both first-time buyers and experienced investors. Compact, cost-effective, and easy to manage, studio apartments are a smart property investment for 2025.
Investing in studio apartments in the United Kingdom is like securing a prime seat in an exclusive dining room—where high returns and capital growth are on the menu. With rising urban demand, these compact investments offer a perfect balance of affordability, strong rental yields, and long-term value.
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FAQs About Studio Apartments UK
Studio apartments typically range from 300 to 1,000 sq ft, depending on the location and developer. Most fall between 400 and 600 sq ft, providing an efficient living space that maximises every square metre.
Yes, couples can comfortably live in studio apartments if the layout accommodates a double bed and essential storage. However, for long-term stays, the limited space might feel restrictive, especially for those needing more privacy or additional storage.
Yes, studio apartments are generally more affordable than 1-bedroom flats. Their smaller size reduces the purchase price and running costs, making them an excellent entry point for first-time buyers or investors.
Usually, yes. Studio flats often fall into lower council tax bands due to their smaller market value. However, luxury studios in prime locations may be exceptions.
The rental income depends on the location and market demand. For instance:
- Liverpool: Average rents for studio apartments reach £819 per month, a 9.7% increase from 2023.
- Manchester: Studio flats generate £1,291 per month on average, reflecting an 11.3% annual increase.
- Nottingham: Studio rents stand at £944 per month, up 8.3% year-on-year.
- Pros:
- Affordable to buy and maintain.
- High rental demand among students, professionals, and couples.
- Energy-efficient and cost-effective for tenants.
- Cons:
- Limited storage space and lack of privacy.
- May feel cramped, especially for long-term residents.
- Open layouts can limit customisation.
A studio apartment is a self-contained living space with an open-plan layout. It combines the bedroom, living area, and kitchen into a single room, with only the bathroom as a separate enclosed space.
Some studios may include dividers or partitions for added privacy, while others rely on clever furniture placement to differentiate zones. These designs focus on maximising functionality and simplicity, making them a practical choice for modern living.
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