Arthur Online looks into the new trend of micro-living, is it good or bad?
With the traditional housing market proving to be too far out of reach for most millennials, young people wanting to live in London are increasingly choosing to rent micro flats. These flats offer an ideal solution for the young professional who does not want a long commute to work.
While these micro flats are being sold at 20% below the local market rate, they are not intended to serve as housing for graduates who are still longing for the student life. Instead, these flats are being aimed towards the ‘squeezed middle’ section of first time buyers who are earning between £30,000 and £60,000. Tenants in these properties tend to be around the age of 28 and make a median income of £32,000 a year.
These flats cost £230-360 a week to rent and include shared facilities for dining areas, lounges, work spaces, laundry rooms and gyms.
They offer an attractive investment prospect for investors because the rent per square foot in each flat is at least 1% higher than for traditional rental units. So far investors have put more than £1bn into micro flats, according to the Independent.
Think-tank Development Economics has reported that building smaller flats on five sites could bring in an additional £200m of income and over 1,000 new jobs to London through providing affordable accommodation for young workers in the city’s centre.
A property group named Spaces has developed a micro flats project at London Bridge which has 172 units and is worth around £80m. Spaces have many of their micro flats available for rent.
The big risk with these developments is the possibility of standards slipping and flats falling below the accepted dimensions for safe housing. Innovative space-saving designs mean that developers are getting away with making smaller flats than regulations allow for.
It is also unlikely that demand for micro flats will ever overtake the need for studios and one-bedroom flats. While these flats are well-furnished, co-living is undoubtedly a short-term living solution, ideal for single people and couples who opt for location over size. Although co-living is ever increasing in popularity, there are still many people who are put off living in properties with shared facilities because of how they mimic student accommodation.
To read more about micro-homes and whether or not they would be a good investment for you, click here.
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