Buying a studio flat

EmilyG2010

Hi

Advice needed please
I'm supposed to be exchanging contracts on a studio flat in east london this week and I've only just discovered that it is difficult to get mortgages for studio flats. This shouldn't affect me getting my mortgage but I am concerned it will make the flat more difficult to sell. I would appreciate some advice on whether I'm making a big mistake.

I'm a first time buyer and don't want to get too bigger loan. Plus, as a singleton, I feel the place offers all the space I need. Longer term I'm considering using it as a pied a terre and letting it out. However, I also would like reassurance that selling is an option if I need to sell - without a massive loss of capital.

The place is new build, next to a tube station and 380 sq foot. It is on the 16th floor.

Thanks in advance

[Deleted User]

I would imagine that there will be plenty of other people in your situation who would buy a studio flat for exactly the same reasons you've listed, especially in London where it's all many FTBs can afford.

EmilyG2010

Thanks Gaptooth

One way of looking at this could be that if the property market falls, then one beds will suddenly fall in the affordability of ftb, making studios less sellable.

I could just stretch to a one bed at the moment... but it wouldn't be a nice one. Plus running costs would be higher if I move back to family in Wales.

abankerbutnotafatcat

Yes studios are more difficult to mortgage but only because of the link to resaleability. You say East London, are we talking about Romford of Shoreditch? A studio flat in an inner-city, desirable, trendy area should not present too great a problem in finding a lender.

EmilyG2010

thanks Banker

Bromley by Bow E3... guess it's pretty trendy

EmilyG2010

I've been doing some research and there's a building called Pan Peninsula in trendy Canary Wharf which has around 50 studio flats currently for resale. It doesn't look like these are selling too well...

Lizling

I think that just being a studio flat wouldn't be a problem on its own since it's in London, but unfortunately a lot of lenders are also less likely to lend on anything with more than 4 or 5 floors and typically want bigger deposits for new builds. Put studio, 16th floor and new build all together and that might scare off some of the high street lenders.

kwmlondon

EmilyG2010 wrote: »

thanks Banker

Bromley by Bow E3... guess it's pretty trendy

Hi,

I don't think it will be a problem, as long as you accept that if the market rises your property will not rise as quickly as other properties, but will fall at the same rate if the market slows.

However, it's kind of reflected in the price. If your property has things going for it - location, layout, condition etc. - then it will do well compared with other studio flats.

Just do your research, know the area, know the market and know the risks.

penthouse89

There's studios and there's STUDIOS.

I recently viewed one that literally only needed a stud wall put up in order to make it a one bed, it would have been easy to do, but would have ruined the loft-style space.

It was a one bed flat, with a wall missing.

kwmlondon

We are a bit odd here in the UK. People buy houses primarily on the number of rooms, almost everywhere else in Europe they buy on the basis of square metres. We do have a tendency to squeeze as many rooms into as small a space as possible, but hey-ho, that's the way it is.

Does mean that there are some very comfortable studio places that are more habitable than some 1 bed flats, as said above.

tim123456789

kwmlondon wrote: »

We are a bit odd here in the UK. People buy houses primarily on the number of rooms, almost everywhere else in Europe they buy on the basis of square metres. We do have a tendency to squeeze as many rooms into as small a space as possible, but hey-ho, that's the way it is.

Does mean that there are some very comfortable studio places that are more habitable than some 1 bed flats, as said above.

Though mortgage companies aren't quite so stupid

Generally, they refuse mortgages on the basis of floor area, not number of rooms.