Are Apartments Good for Buy-to-Let Investors?
Should you invest in apartments? It's one of the most common questions from new property investors.
The evidence does not support a universal answer.
Article updated: July 2026
The result depends on the apartment, location, purchase price, lease terms, service charges, rent, finance and the buyer's wider plan.
City centre apartments used to be straightforward investment properties. Purchase off-plan, let to young professionals, collect steady rental income. Job done. But the market has shifted considerably since 2020, as tenants' lifestyles have changed. Working from home or hybrid working, for a number of city centre workers, means people have the luxury of choice and can choose between city centre living or suburban communities. The city centre landscape has changed.
This guide examines whether apartments remain good investments for landlords or should you only consider houses. You'll discover the true costs of owning apartments, understand which factors determine profitability, and learn exactly when these real estate assets work (and when they don't).
What Does It Actually Cost to Buy an Apartment?
Across the UK's ten biggest cities, the average flat asking price runs from £129,432 in Newcastle upon Tyne to £764,478 in London. On top of the price come stamp duty, legal fees and running costs.
Top 10 UK Cities for Apartment Investment
Major UK cities offer the strongest combination of tenant demand, employment growth, and infrastructure investment, however their prices reflect this strong buyer demand. These are the current average flat asking prices across the UK's largest Cities.
| Ranked by Population | City | Average Flat Asking Price |
|---|---|---|
| 1 | London | £764,478 |
| 2 | Birmingham | £146,374 |
| 3 | Manchester | £199,002 |
| 4 | Leeds | £151,181 |
| 5 | Glasgow | £161,632 |
| 6 | Liverpool | £130,338 |
| 7 | Sheffield | £135,656 |
| 8 | Edinburgh | £236,970 |
| 9 | Bristol | £245,775 |
| 10 | Newcastle upon Tyne | £129,432 |
London's average flat price in this table sits more than five times above several northern cities. Birmingham sits at £146,374, while Manchester is higher at £199,002. Those prices describe entry cost; they do not by themselves establish investor demand or future growth.
Scottish capitals Edinburgh and Glasgow show contrasting markets, with Edinburgh's affluent local residents and demographics pushing prices to £236,970 whilst Glasgow offers better value for landlords budgets at £161,632.
Liverpool, Newcastle and Sheffield all record average flat prices below £140,000 in this table, but price data alone does not establish rental demand, gross yield or capital-growth prospects. Current local rents, transactions and tenant evidence are needed for those comparisons. Our guides on Manchester, Birmingham, Liverpool, and Leeds examine those local markets in detail.
Most Expensive Areas for Apartment Investments
Kensington and Chelsea is the UK's most expensive local authority for flats, with an average sold price of £1,088,323. Based on the latest Land Registry data, these are the 20 most expensive local authorities for flat and maisonette purchases:
| Rank | Local Authority | Average Flat Sold Price |
|---|---|---|
| 1 | Kensington and Chelsea | £1,088,323 |
| 2 | Westminster | £870,687 |
| 3 | Camden | £766,047 |
| 4 | Hammersmith and Fulham | £613,720 |
| 5 | Islington | £574,600 |
| 6 | Wandsworth | £540,215 |
| 7 | Hackney | £537,157 |
| 8 | Richmond upon Thames | £499,450 |
| 9 | Southwark | £483,120 |
| 10 | Tower Hamlets | £473,430 |
| 11 | Haringey | £471,160 |
| 12 | Lambeth | £460,383 |
| 13 | Merton | £428,270 |
| 14 | Ealing | £414,339 |
| 15 | Waltham Forest | £385,917 |
| 16 | Lewisham | £384,843 |
| 17 | Brent | £380,690 |
| 18 | Barnet | £380,433 |
| 19 | Kingston upon Thames | £373,548 |
| 20 | Hounslow | £369,278 |
London dominates the premium apartment market entirely. Every single location in the top 20 most expensive sits within the capital. Central London boroughs like Kensington and Chelsea command prices over £1 million on average, reflecting their global appeal and constrained supply. Even outer London boroughs like Hounslow, which benefits from Heathrow Airport proximity, make the top 20.
These premium prices create significant barriers for most buy-to-let investors. Yields in expensive locations typically sit between 3% and 5% gross, making cash flow challenging even with substantial deposits. Investors targeting these markets usually prioritise capital appreciation over rental income, accepting lower yields in exchange for potential value growth. Near the bottom of the top 20, flats averaged £369,278 for a buy to let in Hounslow and £380,433 in Barnet. The UK average for a flat was £197,037 in July 2025, so both cost almost twice as much.
Most Affordable Areas for Apartment Investments
These 20 local authorities offer the UK's most affordable apartment prices for first-time and established landlords comparing buy to let properties for sale outside the usual city centres.
| Rank | Local Authority | Average Flat Sold Price |
|---|---|---|
| 1 | Merthyr Tydfil | £66,781 |
| 2 | Na h-Eileanan Siar | £71,876 |
| 3 | East Ayrshire | £73,854 |
| 4 | Blackpool | £73,724 |
| 5 | North East Lincolnshire | £75,573 |
| 6 | Hartlepool | £76,024 |
| 7 | Middlesbrough | £76,406 |
| 8 | Boston | £76,596 |
| 9 | North Lincolnshire | £76,962 |
| 10 | Burnley | £76,904 |
| 11 | Hyndburn | £78,125 |
| 12 | Blaenau Gwent | £79,937 |
| 13 | Kingston upon Hull | £79,724 |
| 14 | Redcar and Cleveland | £80,139 |
| 15 | County Durham | £80,412 |
| 16 | Sunderland | £83,489 |
| 17 | Rhondda Cynon Taf | £84,332 |
| 18 | North Ayrshire | £84,994 |
| 19 | Neath Port Talbot | £85,087 |
| 20 | Blackburn with Darwen | £85,854 |
Affordable apartment markets concentrate in former industrial areas across the North of England, Scotland, and Wales. Merthyr Tydfil in South Wales tops the affordability rankings with average flat prices below £67,000. Seaside town Blackpool and northern former manufacturing centres like Burnley, Hartlepool, and Middlesbrough all offer sub-£80,000 average prices.
A lower entry cost raises the calculated gross yield where achievable rent remains the same, but this price table does not provide property-level rent or support a general yield range. Population, employment, owner-occupier demand, voids and management requirements also vary by area and property. Our guides on Blackpool buy-to-let and Middlesbrough buy-to-let examine their local evidence. A low area average does not by itself identify below market value properties; that requires comparing an individual flat with completed sales for similar local homes.
Do Apartments Go Up In Value?
Apartment prices have risen over time. In January 1995 the average sold price for an apartment in the UK was £107,188. By July 2025 the average sold price for an apartment in the UK reached £197,037. This is an 82.83% increase.
When you view the UK property data side by side with the HM Land Registry sold house prices for 'All property types' (as shown in the images below) you can see the house price growth trends are very similar.
Apartments have historically risen in value at the same time as houses and dropped in value at the same time too. Across the UK as a whole, apartments have gone up in value over time at a similar level of capital growth to houses.
What are the Costs Involved in Buying a City Centre Apartment?
Beyond the purchase price, buying an apartment involves these immediate costs:
Stamp Duty: Buy-to-let investors pay an additional 3% stamp duty surcharge. On a £150,000 apartment, you'll pay approximately £7,500 in stamp duty. Use our stamp duty calculator for precise figures.
Legal Fees: Conveyancing for apartments typically costs £1,200 to £2,000 because leasehold properties require additional legal work compared to freehold houses.
Survey Costs: A basic home valuation survey costs £300 to £500, whilst a full building survey costs £600 to £1,000.Mortgage Arrangement Fees: Lenders typically charge £995 to £1,500 for buy-to-let mortgages, though some offer fee-free products at slightly higher interest rates.
Total Upfront Investment: For a £150,000 apartment with an illustrative £37,500 deposit, expect to invest approximately £50,000 to £55,000 once you include all purchase costs.
Annual Ownership Costs
The yearly buy to let costs on an apartment include the service charge, ground rent, buildings insurance, letting agent fees, maintenance and safety certificates. Here's what apartment owners typically pay for each:
Service Charges: £1,500 to £4,000 per year depending on the building and facilities. Buildings with gyms, concierges, and lifts charge premium rates. These charges are likely increase annually inline with inflation.
Ground Rent: £150 to £500 per year for most apartments. Some older leases include escalating ground rent clauses that double the charge every 10 to 15 years. Always check ground rent terms before purchasing.
Buildings Insurance: Usually included in service charges, but verify this. If not included, expect £200 to £400 annually.
Letting Agent Fees: Typically 10% to 15% of rental income for full management services. On £900 monthly rent, that's £1,080 to £1,620 annually.
Maintenance and Repairs: Budget £300 to £600 annually for internal maintenance like boiler servicing, appliance repairs, and general wear and tear.
Safety Certificates: Annual gas safety certificates cost £60 to £100. Electrical safety checks every five years cost £150 to £250.
Real Cost Example: A £150,000 apartment generating £900 monthly rent (£10,800 annually) might face these annual costs: Service charge £1,200, ground rent £250, management fees £1,300, maintenance £400, certificates £80. Total ongoing costs: £3,230. This reduces your gross yield from 7.2% to a net yield of approximately 5.05%. Our guide on how to calculate rental yield has a calculator, so you can try the same sums with your own price, rent and running costs.
Frequently Asked Questions
How do service charges affect apartment investment returns?
Service charges represent the biggest ongoing cost difference between apartments and houses. These charges cover building maintenance, communal area cleaning, insurance, management fees, and any shared facilities. Annual charges typically range from £1,500 to £4,000, but premium developments with extensive facilities can charge £5,000 or more. On a £150,000 apartment generating £10,800 annual rent, a £3,000 service charge immediately reduces your yield by 2 percentage points. This transforms what appears to be an attractive 7.2% gross yield into a more modest 5.2% net yield before other running costs. A house has similar outgoings, but they can arrive as a large one-off maintenance bill. In a leasehold flat, the building's upkeep is arranged for you and paid for through the service charge. Always request the last three years of service charge accounts before purchasing. Look for unexplained cost increases, high management fees, or insufficient sinking fund reserves for major works.
What lease length creates problems when buying an apartment?
Problems start once a lease falls to 80 years or less, because extending it then costs much more. Properties with fewer than 70 years remaining become increasingly difficult to mortgage. Most lenders won't offer buy-to-let mortgages on short lease properties, limiting your buyer pool when you want to sell. Lease length directly affects property value, and apartments with more than 100 years remaining face minimal value reduction from the lease. To help homeowners and landlords, the Government provides a leasehold advisory service for free. Our complete guide to leasehold properties explains this further.
How long do apartments last?
A modern purpose-built apartment block can stay sound for many decades if it is well maintained. However, several factors affect practical lifespan. Building quality varies considerably. Premium developments with robust construction and quality materials age better than budget builds using cheaper specifications. Buildings constructed in the 1960s and 1970s often face remediation work for issues like concrete degradation or inadequate insulation. Recent construction improvements and building standards generally mean higher quality builds. Maintenance quality determines how well buildings age. Well-managed blocks with adequate sinking fund reserves can address issues before they become serious.
Do new-build apartments have better energy efficiency than older properties?
New-build apartments typically achieve EPC ratings of A or B, making them among the most energy-efficient residential properties available. This efficiency translates into low running costs that appeal to tenants, particularly given recent energy price increases. Many landlords now try and target a minimum EPC rating of C. Based on recent Government net zero targets, properties rated D or below could need expensive upgrades to remain lettable. Our EPC regulations guide explains these requirements.
What fire safety checks should I do before buying an apartment?
Before buying, ask for evidence that the building's fire safety assessments are complete. If the building is over 18 metres tall, also ask for an EWS1 form (External Wall Fire Review). This certificate confirms whether external walls meet safety standards. Fire safety concerns continue to affect apartment investments following the Grenfell Tower tragedy and subsequent investigations. Some buildings require expensive remediation work for cladding or other safety issues.
How Do Apartments and Houses Compare for Buy-to-Let?
Apartments and houses differ in entry cost, yield, ownership and tenant market. Entry costs and gross yields vary by location, size, condition and achievable rent; an apartment can cost less or produce a higher gross yield than a house in the same city, but neither relationship is universal. Houses may bring freehold ownership, greater control over costs and a broader family tenant and resale market. Service charges, lease terms, maintenance responsibilities and local demand determine the net comparison for a specific property.
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