Investing in a Block of Flats in the UK Guide

Buying an entire apartment block, also called block investment, has become an increasingly appealing strategy for investors seeking stronger yields, easier scaling, and more control over their assets. With rental demand in the UK remaining high, especially in major cities, block investing offers significant income potential.

According to Zoopla’s UK Rental Market Report (March 2025) 12 renters are competing for each available property, highlighting ongoing demand. Block buying presents a strategic way to capitalise on this competitive rental market while consolidating management.

Key Takeaways

• Apartment blocks offer stronger, more stable yields than single buy-to-lets
• Buying via an SPV can reduce Stamp Duty and improve tax efficiency
• Freehold blocks provide full control over lettings, leases, and maintenance
• Off-market and discounted opportunities increase long-term value
• FRI leases can deliver long-term income with reduced landlord obligations
• Flexible strategies: short lets, value-add upgrades, or break-up sales

What is an Apartment Block Purchase?

An apartment block purchase involves acquiring an entire building made up of multiple self-contained flats, typically under a single freehold. Unlike buying individual flats, block investing consolidates ownership and often comes with control over communal areas and building maintenance.

Many blocks are purchased with tenants in situ, offering immediate income. These may include:

• Purpose-built blocks
• Converted houses of multiple occupation (HMOs)
• Mixed-use buildings with commercial space on the ground floor

Buying an unbroken freehold block often provides better value than purchasing individual apartments separately, while also giving landlords full control over tenancy agreements, lettings strategy, and communal areas. This combination of cost efficiency and management autonomy makes block investing ideal for those seeking scale, streamlined operations, and stronger yields.

Funding and Finance: What’s Required?

Block purchases usually fall outside standard residential lending. Options include:

• Commercial mortgages: Required if the building contains 5+ apartments
• Cash buyers: Often prioritised by sellers for speed
• Bridging finance: Used where refurbishment or planning is part of the strategy, or when buying BMV

According to the UK Finance Buy-to-Let Lending Q4 2024 report, 52,648 new buy-to-let loans were issued in Q4 2024, totalling £9.6 billion - a 39% increase year-on-year. Over 70% of professional landlords now purchase via limited companies.

Why Many Investors Use SPVs

Many investors opt to buy apartment blocks through a special purpose vehicle (SPV) - a limited company created solely for property investment. This structure offers two major advantages:

• Stamp Duty efficiency - When buying multiple dwellings, you may qualify for Multiple Dwellings Relief (MDR), where Stamp Duty is calculated on the average price per flat. This can significantly reduce your tax bill compared to individual purchases.
• Tax treatment - Rental profits within an SPV are subject to Corporation Tax instead of personal income tax. This is often more tax-efficient, especially if profits are being reinvested into further property purchases.

Most apartment block valuations are supported by independent RICS-certified surveys, which help underpin lending, insurance, and long-term value.

Lenders will also assess your experience, proposed rental yield, and loan-to-value (LTV) ratio.

Rental Yield and Income Potential

One of the key advantages of buying an apartment block is the ability to generate diversified, consolidated income across multiple tenancies. This structure offers greater stability than single lets, as a void in one flat is offset by income from others.

In some cases, blocks may include properties let on FRI (Full Repairing and Insuring) leases, where the tenant is responsible for maintenance and insurance costs. These leases typically span 10–50 years, providing long-term income security and reducing landlord liabilities.

Investors can typically expect:

• Gross yields of 6% or more in well-located regional markets
• Additional uplift potential through smart asset management and lettings strategy

Block ownership also allows for value-add opportunities, such as:

• Refurbishing tired stock
• Converting larger units into smaller, high-yielding flats
• Reconfiguring shared areas to add tenant-friendly features like bike storage or parcel lockers

Another major advantage is letting flexibility. Investors can adapt their approach depending on local demand, choosing between short, medium, or long-term lets to optimise returns.

These strategies not only boost income but also support capital appreciation, particularly in regeneration zones and high-growth areas.

Exit Strategies

A well-chosen apartment block doesn’t just generate income, it also offers multiple strategic exit routes, depending on your investment goals and market conditions.

Common options include:

• Hold for rental income - Retain the asset for steady, long-term cash flow. With professional management and stable occupancy, this approach can deliver strong net returns year after year.
• Break-up sale - Increase capital value by selling individual flats with separate leases. This “break-up” strategy can boost total resale value by 20–30% compared to selling the block as a single asset.
• Refinance and reinvest - Release equity once the block has been stabilised or uplifted in value. This allows investors to scale their portfolio without a full disposal.

The best exit route depends on your long-term objectives, tax position, and local market performance. A well-managed block gives you the flexibility to adapt your strategy as market conditions evolve.

Rothmore Property: Unlocking High-Yield Opportunities

At Rothmore Property, we offer off-market full apartment blocks and high-performing residential assets in key UK cities including Manchester, Birmingham, London, and Liverpool. Our clients range from portfolio landlords to overseas investors seeking turnkey investments with robust rental returns.

With access to over 60 new build developments across the UK and strong relationships with developers, we help clients source, structure, and manage profitable apartment block acquisitions. As an award-winning agency, we offer full support, from sourcing and due diligence to lettings and exit advice.

Scale Smarter with Apartment Block Investments

Forecasts from leading analysts project that Manchester city centre could see capital growth of over 20% by 2028, reinforcing the long-term appeal of block investments in key UK cities.

Whether you're expanding your portfolio or exploring your first block purchase, contact our team today. We can help you identify high-performing blocks, navigate funding options, and secure deals in areas with strong growth and rental demand.