Small Homes Can Be Beautiful For Buyers And Investors

Property journalist Sharon Dale looks at the rise of the micro flat

There’s a saying in Japan that you don’t need more than half a tatami mat to stand on and a full mat to sleep on. It comes from Zen Buddhism and is something that homeowners and renters bear in mind as they furnish their tiny kyosho jutaku, better known here as micro flats.
Apartments of 180 sq feet are the norm in Japanese cities, including Tokyo, where space is limited and property values are sky high. Thanks to the same limitations, they are becoming more popular here in Britain.

Defined as a home with a floor space of less than 395 sq ft, there are about 8,000 a year being built in the UK but numbers are rising by 40 per cent a year. They are most common in London where tiny studio flats proliferate but the trend is spreading to other cities.

For homebuyers and buy-to-let investors, the question is “are they worth it?” The answer lies in the location, price per square foot, natural light and good design.
If a micro flat scores highly on all the above then they are worth considering as small means more affordable and they offer first-time buyers a chance to get on the property ladder.
For landlords, they may well make a long-term rental home but could be more lucrative as a holiday let, although check the terms of the lease as some prohibit any form of letting other than the standard assured shorthold tenancy.
Holiday lets are now more tax efficient than a conventional let as they are treated as a business rather than as an investment by HMRC. This means mortgage interest tax relief, which is being scrapped on conventional buy-to-lets, is applied. It can be offset against rental income for tax purposes. Council tax, utility bills and repair costs can also be deducted from the income and there will be capital allowances for furniture, fixtures and fittings.
To qualify, the property has to be available to let at least 210 days a year and must be rented out for at least 105 days. If you don’t plan to manage and market the property yourself, then check that support services are easily accessible i.e. management and cleaning.
Holiday let management fees are usually between 20 and 25 per cent but are worthwhile, especially on a labour intensive city flat, where short breaks will most likely be your bread and butter.

Before you buy check the location. Is it worth sacrificing space for? If not, then double check whether it is up-and-coming.
Work out the price of the apartment per square foot and assess it against other micro flats or one-bedroom and two-bedroom flats in the same or similar developments. This may provide you with a bargaining tool when securing a deal with the developer.
Before you even consider buying, assess the quality of light and the design. Natural light and views are absolutely vital in a micro flat. A large window is important in making what could be a claustrophobic space into one that looks and feels good.

A micro flat is likely to be one room with a bathroom. Clever design is crucial and, providing the kitchen area is well placed, you may be able to work wonders.

I’ve seen some great examples of this. The best was a tiny studio flat my mum rented in London for a very reasonable price. It was in a large block of flats in upmarket Marylebone and the kitchen - I am being generous here - was on one side of the entrance corridor and consisted of a sink, slimline floor-standing cupboards, a mini oven and a wall-mounted microwave and wall cupboards.
The living/sleeping space had a wall bed - these fold on to the wall and resemble a cabinet by day - you can usually fold them away with the bedding on. Either side were built-in wardrobes with lots of storage space. The sofa was a sofa bed - useful for me when visiting - and there was a fold-up dining table with four fold-up chairs. Best of all was the huge window. It flooded the flat with light.
Another superb example was a studio flat near Leeds owned by a designer. She commissioned a grown-up platform bed with desk space underneath. She had also included plenty of storage and accent lighting. Again the star of this show was a huge picture window. It brought in natural light and had long-range views.
For more ideas on small space living take a trip to Ikea. No-one does storage solutions and small space living better.

Publish date: 16/08/2018

Publisher: New Home Finder