One-bed flats tipped for biggest rental growth over next 12 months

Landlords predict that one-bedroom flats will be the property type to increase most in value over the next year. 

Meanwhile, two-bedroom flats are predicted to generate the highest yields, according to a survey from short-term lender Amicus Property Finance.

A quarter of landlords surveyed said they expect one-bed flats to offer the most attractive capital gains in the next twelve months. This was closely followed by student accommodation in university towns and cities.

Two-bedroom and three-bedroom flats also scored highly, while landlords noted that they expect terraced properties to be the highest performing houses. 

Maisonettes were the least popular property type, with just 3% of landlords surveyed predicting capital gains. 

When it comes to yields – two-bedroom flats came out on top, followed by student accommodation, three-bedroom flats and one-bedroom flats. 

New build properties scored higher than terraced houses and houses on established housing estates came out worst, with just 5% of landlords expecting this property type to generate attractive rental yields.

"Flats are the clear winners over houses and maisonettes for both capital growth and rental yields and this is reflected in our own experience in servicing professional landlords’ short term borrowing requirements," says John Jenkins, Amicus' chief executive.

The latest figures from LendInvest show that buying multiple properties – particularly in the North – will often generate the same or better rental yields, while demanding as much as 50% less stamp duty, compared with one property in Inner London that costs the same.

For example, it calculates that two three-bedroom properties costing a total of £250,000 in Durham would generate a yield 200% higher than a studio flat in South East London which costs the same – and with a stamp duty bill that's 30% lower.