When choosing the best property type, factors like location, tenant demand, and investment goals all play a crucial role – especially if the aim is to generate rental income. Investing in high-demand areas has consistently been one of the top strategies for maximising returns, offering higher rental yields and faster capital appreciation.

Recent research suggests that flats, in particular, are an ideal choice in the current market for boosting returns. This trend isn’t new, as flats and smaller, energy-efficient properties have long been favoured by tenants looking to lower their living costs, making them a smart option for investors.

Apartments Generate a

Better ROI

When investing in property, the best type of property to choose depends on your target market and location. For example, if you’re targeting families in suburban areas, a small or medium-sized house might generate higher tenant demand. However, smaller properties, such as apartments, can offer the highest yields if located in the right area.

Research from Inventory Base shows that apartments currently provide the best yields, with a UK average rental yield of 6.4%. Additionally, flats have experienced the strongest rental growth, with monthly rents increasing by 9.3% over the past year, which is the highest of any property type. 

This growth comes at a time when flats have also seen a 0.9% decline in property prices, making them an even more attractive option for investors looking to maximise returns. Over the past 12 months, the average rental yield for flats increased by 0.6%, outperforming other property types like terraced homes (0.4%) and semi-detached properties (0.2%).

For investors aiming to achieve strong, reliable returns, apartments represent a compelling choice in the current market.

Apartments are Available at

Lower Price Points

While securing the highest rental returns is a key priority for most buy-to-let landlords and property investors, there are several other factors to consider to ensure you meet your broader investment goals.

Investing in apartments is often the most accessible option, particularly for first-time investors or those with a smaller budget, as flats are usually on average more affordable than other property types in most cities. This lower entry point allows investors to enter the market and begin generating returns without the need for significant upfront cash.

For investors waiting to expand their portfolios, apartments offer additional advantages. The lower price point enables investors to purchase multiple flats, increasing rental income by having multiple income streams from different tenants. This strategy not only increases potential returns but also increases stability, as multiple smaller investments can be more flexible and resilient than relying on a single, larger property.

Located Closer to

City Centres

Another compelling reason why landlords should be investing in apartments is their prime locations, often situated closer to city centre amenities, which is a major factor for buyers and renters. Proximity to shopping centres, restaurants, entertainment facilities, public transport, and employment opportunities makes apartments highly attractive. Especially to young professionals and first-time buyers seeking convenience and a vibrant lifestyle.

This demand for centrally located living spaces is causing a rise in the popularity of apartments over larger, suburban properties. As more people prioritise shorter commutes and access to cultural and social amenities, city-centre apartments are becoming increasingly sought-after. This means apartments are not only desirable but also have strong growth potential. For investors, this will equal higher rental yields, consistent tenant demand, and the opportunity for capital appreciation in a thriving market.

Apartments are Usually More

Energy Efficient

Energy efficiency is becoming increasingly important for both buyers and tenants, and this trend is only set to grow. Apartments are generally cheaper to run than houses, making them attractive to tenants looking for lower monthly bills alongside a comfortable living space.

As tenants demands change, energy efficiency has become one of the top priorities. Factors such as government regulations, rising environmental awareness, and the financial advantages of energy-efficient properties are driving this demand.

With energy prices soaring, the cost-saving benefits of efficient homes are now front and centre for tenants, especially first-time buyers looking to minimise costs. A survey by OVO Energy found that 66% of potential buyers in the next two years are particularly interested in energy-efficient technologies, and 35% are more likely to make an offer on homes with eco-friendly features such as solar panels.

Related Articles

  • Property Investment in Leeds

    Property Investment in Leeds

    Property investment in Leeds ticks all the boxes for savvy investors, offering the perfect blend of opportunity and returns. Morley was recently...

    Learn more
  • Capital Gains Tax: What You Pay It On, Rates, and Allowances

    Capital Gains Tax: What You Pay It On, Rates, and Allowances

    Have you heard about Capital Gains Tax (CGT) but are unsure how it works or why it matters? You’re not alone. In this article, we’ll break down...

    Learn more
  • Real Estate vs Stocks: Where to Invest Your Money

    Real Estate vs Stocks: Where to Invest Your Money

    When it comes to investing, there are various options, each with its risks, rewards, and potential for growth. This article will break down the key...

    Learn more
  • Manchester’s Property Market: Explained

    Manchester’s Property Market: Explained

    Manchester’s property market has quickly emerged as one of the UK’s most dynamic and fast-growing markets, offering a wealth of...

    Learn more

Explore our Investment Guides

Take a look
Explore our Investment Guides
Chat to us

As Seen In

Trustpilot

Join CityClub Today to Receive:

  • Priority access to exclusive off market investments
  • Below market value pricing
  • Out of hours investor support chat
  • Allocated solicitor for hands free conveyancing