I would like to make an investment in London but all I can afford is a studio flat. I have calculated that I should be able to get a rental yield of 125 per cent. However, the mortgage broker I spoke to said it would be very difficult for me to get a buy-to-let mortgage on a studio flat and could not help me. I am baffled as there is a huge demand in London for studios as that is all many people, particularly single people, can afford. Are there any options here?
It is true, that some lenders do not lend on studio flats.
Unfortunately, whilst they offer tremendous return as an investment, they also have a limited market for resale and some lenders are uncomfortable with this type of security.
However the good news is that there are many lenders who do lend on studio flats.
The lenders who do offer funding on a studio will ask that it is at least 30sqm in size (although there are a couple of lenders who do not have a minimum size requirement) and will be focused on the valuers comments on resale.
So yes, I think there are options! You can send us an email, or call us on 0845 345 6788 to find out what these options are.