These days, £1m is not such an outlandish sum for a property in the smarter parts of London, but you might assume that it would still buy you at least one decent guest bedroom. Wrong. In the centre of the capital, sales of one-bed flats with a multimillion-pound price tag have risen by 25% in the past year, according to research by E A Shaw, the property consultants, as well-heeled buyers discover the charms of what has been dubbed the “ego pad”.

Part of the explanation, of course, is inflation. “To be blunt, £1m is not the massive sum that it was,” says Adam Stackhouse,head of sales for Chesterton Global. Statistics from Savills, another agent, bear this out: a flat in central London selling for £1m today would have been yours for £715,000 five years ago.

But there is also a broader trend at work: the desire of certain buyers for more space, rather than more bedrooms. In a move that, even a few years ago, would have been considered eccentric – or downright madness – people are even knocking down walls to create homes with lots of living space and just one bedroom. Among them is Tom Ford, the fashion designer, who spent several million pounds turning his Chelsea property into a one-bed abode.

So why is this happening? E A Shaw says typical ego-pad buyers, not surprisingly, are high-net-worth individuals, often working in the City, who are looking for a home with plenty of entertaining space, a large master bedroom and what it calls “wow factor”. The type of flat is epitomised by the Costume Warehouse, a 1,138 sq ft loft-style one-bed property in Covent Garden, which has just sold for £1m.

The trickle-down effect

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Background

• Wheels of fortune

• London’s über-rich call the shots

• The secret side of SW7

Many buyers are from overseas, which means they have become accustomed to the convenience of lateral space; that is, a large flat spread across one level rather than rooms piled on top of one another as you’d find in a typical London terrace. They are also used to thinking in terms of floor area, a concept that British buyers and agents have only recently begun to embrace.

“You now value property in terms of pounds per square foot; people will assess it on that basis rather than how many bedrooms it has,” says Stackhouse. As a result, he says, international buyers are happy to pay huge sums for something with fewer bedrooms. The locals are also catching on, albeit slowly. “English buyers have an innate inability to understand what’s going on when there’s a property on the market for £1m and it has only one bedroom,” he says.

Yvan Verlaine, 62, a banker from Belgium, is a case in point. He bought a one-bed flat in Covent Garden five years ago for £850,000; for sale through E A Shaw for £1.5m, it has just gone under offer. What attracted Verlaine in the first place was the location – within walking distance of the City but with plenty to do nearby – and the quality: the flat is in a listed building and had been renovated to a high specification. “If you can afford it, there’s no risk,” he says. “A product like this will always keep its value.”

It is not as if buyers of these types of property are getting less space, either – far from it. Verlaine’s flat is 1,006 sq ft – well above the 700 sq ft that Stackhouse says is the minimum a property needs to break the £1m barrier. E A Shaw, meanwhile, has another 1,061 sq ft loft-style one-bed flat in a portered building just behind Drury Lane in the heart of London’s theatreland for £995,000 – although, once you have paid the stamp duty, you will be back over the £1m mark.

Quite simply, the bigger the space, the more money it will fetch, regardless of how many bedrooms: Hobart Slater, a Knightsbridge-based agent, has a 1,427 sq ft one-bedroom flat in South Kensington on the market for £2m, which is now under offer.

The “ego pad” is not only about lateral space. A lift is also important: nobody likes having to walk up several flights of stairs, especially if they have just forked out £1m. According to Stackhouse, properties like this must be “very gadget, although not in a huge way – it’s just what you expect at this level of the market”. The extra facilities offered in a high-end development, such as the Knightsbridge, where prices start at £500,000 for a 370 sq ft studio, will also push up the price.

Convenience is an important factor, too. Flats that fetch these sums are usually in portered blocks; buyers are often people looking for an alternative to a top-class hotel, where they are used to their every whim being catered to. “They have spent extended periods of time in a Carlton Tower or Mandarin Oriental,” says Rupert des Forges, a partner in the Sloane Avenue office of Knight Frank. “They feel it justifies buying. It also means they don’t have to pack a suitcase every time they leave.”

Typical of such buyers is the American director of a large communications consultancy; together with her husband, who works in international finance, she bought a flat in Kensington in April for £1.1m. The couple, both in their thirties, who declined to be named, work in various countries but spend so much time in Britain that they decided it made sense to acquire a property here.

“We travel so extensively, we wanted the comfort that comes with a luxury hotel suite, but fitted with our own furniture,” she says. “We chose a new building that not only has high security but also a full concierge service. We come and go with little or no worries of what transpires while we are away on business, or back at home in the States.”

Most important of all, of course, is location. Nobody is going to pay £1m for a one-bed flat in Streatham or Walthamstow. Cliff Gardiner, director of the Buying Solution, a property-finding agency, says these kinds of prices are going to be paid only in what he terms “the prime market in the very best areas”. Beyond Knightsbridge – the primary environment of the ego pad – this means places like Belgravia, Covent Garden and Hampstead, which have all seen one-bedders sell for £1m. It is not just London, though: the pretty (and commuter-friendly) Buckinghamshire town of Gerrards Cross recently had one-bed flats for sale above £1m.

So with space, looks and location covered, what does it matter how many people you can squeeze into your home for an overnight stay? Why not just put them up in the hotel along the road? “These people are pretty affluent and can indulge themselves,” says Robert Hobart, director of Hobart Slater. “If you don’t need two bedrooms, why bother?”

Get more for your million

What else can you get for £1m if you want more for your money?

- Four three-bed cottages in Weston Rhyn, Shropshire

-Two two-bed maisonettes or flats in Fulham, west London

-10 two-bed terrace houses in Leeds

- Five three-bed newish family homes in Birmingham

- 25 two-bed houses in Hull (but they may need a little – or a lot – of work)

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