The rise of the 3-bedroom investment
It’s no secret that up until the beginning of 2020 2-bedroom apartments reigned rule over all residential buy to let investments, providing the highest NET yields. This, however, is beginning to shift in dynamic for the buy to let market, with investors leaning towards popular demand of 3-bedroom apartments. Why have the tenants needs altered you ask? Simply put, young professionals.
With the flock of young professionals moving to the central cities across the UK beginning their careers, the 3-bedroom residential investment has seen a spike in appeal, specifically because this larger apartment can offer the young working professional more than a one bedroom flat, and this is the opportunity to save money.
This all sounds contradictory to popular belief, however, young professionals who are moving to Manchester for example, are significantly happier to pay £500 pcm for a room in a three-bedroom apartment sharing with other young working professionals, than to pay £750 pcm for their own one-bedroom apartment. By sharing a three-bedroom apartment with two other professionals, the individual is exposed to the extremely necessary networking opportunities and social life within the larger city they have moved to and are saving £250 pcm on top of this. With the new normal of residential city living providing residents with 5* facilities for free, the young professional is not only saving hundreds of pounds in rent per month, but they are also forgoing the expense of a gym membership and other various amenities, as they are all under one roof in their own building.
In addition to this shift in dynamic for the buy to let market, tenants are also beginning to balance their work and life experience, by converting whatever spare space they may have in their apartments into office space. With some residents now eager for an extra bedroom for their family, the three-bedroom investment is exceedingly on the rise and will become the new expectation for buy to let investors for the indefinite future. It is unlikely that life will instantly go back to how it was before the outbreak at the beginning of next year, and these practices are going to continue for those expected to share their time between their office space and home.
The 2-bedroom investment is no longer the top contender for the demand of buy to let residential apartments and will have to make way for the increase in desire for 3-bedroom homes.