• Are micro-apartments a worthwhile investment?

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    With an ever growing list of micro apartments being built by developers, are they really a worthwhile investment?

    Properties under 37sqm are deemed to be micro properties and have seen increasing popularity from developers looking to build as many units in a block as possible. It is fair to say that the average price of these units is much lower than a regularly sized property but this doesn’t tell the whole story. The majority of UK mortgage lenders will not lend on properties that are this small given the limited onward demand for sales. Therefore the lower average price is actually a function of the restricted market the properties fall into.

    Furthermore, it must be noted that with limited demand for these properties, and an apparent oversupply, the average price for micro apartments doesn’t increase at the same level you are seeing from a regular apartment. A look at figures shows that regularly sized properties have increased by 8.7% whereas properties between 30 & 37sqm rose 6.9% and as you get even smaller, the increases in prices also decrease. Properties under 30sqm only rose 5.4%. If you are investing in areas for capital growth, it won’t take very long until you are left behind by investors that have invested in regular properties.

    But just how big is 37sqm? Well that is about the same size as a carriage on the London underground. The issue is, however, that a lot of developers are building apartments even smaller than this – we have seen apartments as small as 20sqm but there are apartments being constructed now that are just 8sqm which is only just bigger than a prison cell.

    If you would like more information on this or would like to discuss alternative opportunities, please give us a call on 01342 840050, email enquiries(Replace this parenthesis with the @ sign)choicesacquisitions.co.uk or fill in the form on the Contact Us page.

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