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Can I Get A Mortgage On A Studio Flat?

MORTGAGES | 13.07.2022

The prices of living are increasing, and so understandably studio flats are becoming more and more popular among singles and couples living in areas whose house prices are high or continuously rising. Because of this, you may be wondering if getting a mortgage on a studio flat is the best option for you. However, despite their affordability, studio flats and apartments can often be difficult to get a mortgage on. 

Can I get a mortgage on a studio flat?

Yes, you can get a mortgage on a studio flat - but this depends on your circumstances. There are different types of mortgage types available for studio flats including residential and buy-to-let mortgages - but whether your application is successful depends on if you meet the lender's eligibility requirements. Eligibility requirements for studio flats can be more strict and require more proof and documentation than most other property types.  Depending on where the studio is located, the flat may be deemed as ‘non-standard’ by your lender, meaning you may be offered less favourable terms, or refuse to lend for that particular studio. 

Studio flat mortgage criteria

Aside from personal profile and documentation, getting a mortgage on a studio flat can depend upon a number of things. Here are a few:

Size 

Even though more and more people are opting for smaller homes, certain lenders still aren't overly enthusiastic about lending on flats below a certain size - usually around 30 square metres. 

Layout 

When it comes to the layout, there are certain things that lenders favour e.g a kitchen that is separated from the main living space. On the other hand, lenders may be put off by a flat in which the entrance is accessed via an exterior walkway. The design and surroundings of the flat can also be an important factor. 

Nearby commercial property

A flat located above or opposite a commercial property may be problematic. Lenders are often particularly wary of nearby noisy commercial activities such as nightclubs and bars, or those businesses that may pose a fire risk such as restaurants.

What effects being able to afford a mortgage on a studio flat?

Deposit

the larger the deposit, the happier your lender will be. The minimum deposit requirement you’re most likely to need for a studio flat is 10% (if it’s a standard residential property), although certain lenders may accept 5% under the right deposits. 

Credit History

As with most mortgages, the cleaner your credit history, the better. Some marks on your record may not be anything to worry about - but if you have a more serious issue such as recent bankruptcy this may make things difficult for you. If you’re concerned about your credit history, get in touch. Our advisors are experts in helping those find the best deal, even if bad credit is a factor.

Additional costs involved

 When going through the affordability check, many lenders will take into account the extra fees that come with flat ownership such as the annual/monthly cost of the lease, service charges and ground rent. These will likely be factored into your debt-to-income ratio. 

Can I get a mortgage on a studio flat for buy-to-let (BTL)?

Yes, you can get a mortgage on a property type such as a studio flat for buy-to-let purposes as long as you meet the criteria for buy-to-let mortgages which tend to be different to a typical residential mortgage. For instance, they usually require a larger deposit as they are seen as a riskier investment.

Can you get a mortgage on a studio flat if I am self-employed?

Yes, it’s possible to get a mortgage on a studio flat if you are self-employed in the UK but the process of income verification is slightly different to those on PAYE. You may need to provide accounts or show your monthly bank statements instead of payslips. For more information, you can read our article on self-employed mortgages.

Need more help?

If you are still unsure or have any questions about buying a studio flat, speak to one of our experts who will be happy to help and get your mortgage journey started.
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