Of course it can be done...I do it all the time.
I now live on my own in a small one bedroom flat, I share it with a Revell Gato, a Steve Neill U-33, a Steve Neill USS Blueback, tomorrow a Revell Missouri arrives as well, and then there's my submersible and the distinct possiblility of a Novgorod as well. Oh, and I have designs on a 1/32nd scale model of U-441.
I have a common or garden pc desk which holds my pc and is also pressed into service as a building desk, plus an ancient double school desk which everything gets stood on...tools, glues, paints, toolbox, etc. As long as I keep the lounge tidy, it doesn't look out of place. The boats are kept on top of my wardrobe in the bedroom out of harms way, except for whichever is being worked on at the time. My flat is a first floor flat, and I have no problems at all with getting a boat up/down the stairs. The 1/32nd scale U-441 may present problems, but no doubt I'll figure out a way to overcome them.
Where you live shouldn't pose a problem to you at all...I went from a three bedroom house with a workshop and a garage to my flat, and after working out what to put where, I carried on boat building...so can you!
Rich
Oh, forgot to mention that I live alone now, which does help, but I still like to keep the place clean and tidy.