Studio flats can pose a challenge in selling, particularly in a sluggish market. The issue of some studio flats not being eligible for mortgage lending can further complicate the selling process.
While studio flats are seen as low-cost for heating in winter, you will need a fold-up bed to create space.
To learn more about your options for selling your studio flat to a cash buyer, continue reading.
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Why Studio Flats Appeal to Cash Buyers Only?
Around half of mortgage lenders do not provide loans for studio flats. The lenders usually require a minimum size of 40 square meters.
Studio flats must also have separate facilities for food preparation, toilets, and washing.
The market for micro-homes is growing, especially in city centre locations with limited housing availability. This change in demand has led mortgage companies to review their lending criteria.
However, they still have limitations and prefer modern purpose-built studio flats that are small but well-designed rather than older-style studio conversions.
Most mainstream mortgage lenders still reject lending for studio flats, making selling them difficult.
Difficulties In Selling a Studio Flat
The main reason why studio flats can be difficult to sell is because mortgage companies consider them to be a risky asset. Mortgage lenders’ primary concern is ensuring they get their money back.
If the borrower cannot make payments, the lender must repossess the asset and sell it themselves. So, why are mortgage companies so concerned about the saleability of studio flats? There are two reasons:
Sub-prime Property Asset Class
Studio flats are suitable for short-term accommodation for a single person.
Living in a studio flat for more than a year is likely to feel cramped. Living and sleeping in a confined space is okay for a short time only. Living in a small area as a couple can be even more difficult.
Studio flats do not make good long-term accommodation, so they are not a stable asset compared to larger flats and houses.
Lowest End Of The Property Market
One advantage of studio flats is their affordability. However, this can also be a problem.
In a booming property market, when prices are high, studio flats are quickly bought up because larger flats are unaffordable for many.
But in a slow housing market, buyers have more choices, and the price for one-bedroom flats becomes more affordable. As a result, buyers tend to skip over studio flats and opt for a longer-term purchase.
In a slow housing market, there is still a demand for studio flats, but pricing experiences exaggerated downward pressure.
Mortgage lenders also believe that buyers at the lower end of the market, with lower incomes, are more likely to default on their mortgage repayments.
Is it hard to sell a studio flat?
Yes, studio flats can be more challenging to sell than larger properties, especially in a slower housing market. While not impossible, studio flat owners often face longer selling times, receive fewer viewings, and may need to accept lower offers than they initially hoped for.
We’ve seen countless studio flat owners come to Property Saviour feeling frustrated and stuck. They’ve usually been on the market for months, dealt with endless viewings that lead nowhere, and watched anxiously as their property sits unsold while others around them find buyers.
The difficulties with selling studio flats stem from several key factors. Firstly, the limited space naturally restricts your pool of potential buyers. While perfect for a single person or perhaps a couple who don’t mind cosy living, they simply won’t work for families or those who need separate spaces for working from home – something that’s become increasingly important since the pandemic.
Mortgage challenges represent another significant hurdle. Many lenders view studio flats as riskier investments and may be reluctant to offer financing, especially if the property is particularly small (under 30 square metres), lacks a separate kitchen, or sits above commercial premises. This mortgage issue drastically reduces your pool of buyers to cash purchasers only, which inevitably affects how much you can achieve for your property.
Service charges can be another sticking point. We recently spoke with a seller whose studio flat had sat on the market for nine months. Despite being in a decent London location, the £3,000 annual service charge was putting off potential buyers. For a small property, such costs seem disproportionate and make the overall package less financially attractive.
Leasehold issues further complicate matters. If your lease is running short (under 80 years), this can seriously impact saleability. Potential buyers will factor in the cost of extending the lease, which can run into thousands of pounds, and reduce their offers accordingly.
The current economic climate hasn’t helped either. With higher interest rates pushing up mortgage costs, many first-time buyers (typically the main market for studio flats) are struggling to get on the property ladder at all. Those who can are often stretching their budgets to secure slightly larger properties that will serve them longer-term.
If you’re currently trying to sell a studio flat and feeling disheartened, please know you’re not alone. We speak with property owners in similar situations every day. While traditional estate agents might keep suggesting price reductions or promise that “the right buyer will come along eventually,” we understand how draining this uncertainty can be, especially if you’re making mortgage payments on an empty property or need to move quickly for work or family reasons.
At Property Saviour, we take a different approach. We specialise in purchasing properties that face particular selling challenges – including studio flats. As cash buyers, we’re not dependent on mortgage approval, meaning we can move quickly and with certainty. While we can’t offer full market value (no cash buyer can), we provide a guaranteed sale with no fees, no viewings, and no chain complications.
Many of our clients tell us that the relief of having a definite completion date and being able to move forward with their lives is worth far more than holding out indefinitely for a slightly higher offer that may never materialise.
The property market can be particularly cruel to studio flat owners. Estate agents often take these properties on enthusiastically, promising quick sales, only to gradually lose interest when viewings are sparse. Months later, you’re left with a property that’s becoming stigmatised by its time on the market, facing pressure to reduce the price again and again.
If your studio flat has been on the market for several months without success, it might be worth considering your alternatives. You could try auction (though be prepared for fees and no guarantee of sale), rent it out (if permitted by your lease), or speak with a company like ours about a quick, guaranteed purchase.
Whatever you decide, remember that the challenges you’re facing aren’t a reflection on your property or your decisions – they’re simply the reality of a specific segment of the property market. With the right approach and expectations, you can move forward successfully, even in challenging circumstances.
If you’d like to discuss your studio flat situation with empathetic experts who understand these unique challenges, please give Property Saviour a call. We promise honest advice about your options, whether that ultimately involves our services or not. Sometimes, just having a clear picture of your alternatives can bring enormous peace of mind when you’re feeling stuck in property limbo.
Is My Studio Flat Suitable For a Mortgage?
Studio flats are considered a non-mainstream property asset. The more “normal” a studio flat appears, the more likely a mortgage company will be willing to lend.
The size of the flat is the most important factor for mortgage lenders when deciding whether to lend or not. According to the Housing Act, a room with less than 10.2 square meters of floor space is unsuitable for two people to sleep in.
Purpose-built versus conversions
A purpose-built studio flat with “smart features,” such as built-in facilities and a mezzanine floor for added living space, enhances comfort for the occupant.
Buyers and mortgage lenders will be particularly cautious regarding studio conversions, as they will check whether appropriate planning permission and building consent have been obtained.
Location
Mortgage lenders heavily rely on surveyor’s comments regarding “saleability” when deciding whether to provide a loan. The location of the property plays a role in this assessment.
The more upscale the location and the more luxurious the building, the less important the size of the property becomes to the lender. Studio flats above commercial premises and basement flats can also make it more challenging to secure lending.
Rental prospects
If the owner of a studio flat needs to move, the ability to rent out the flat becomes an important consideration. Some leasehold properties have restrictions in the lease that prohibit renting.
However, the rental yield is often quite good for those that can be rented. This is because some local authorities pay the same rent for a studio flat as they do for a one-bedroom flat.
Do studio flats go up in value?
Studio flats can increase in value, but their appreciation is typically more variable and often lower than larger properties. The performance of studio flats as investments depends significantly on location, economic conditions, and specific property characteristics.
Looking at recent market data, there’s a mixed picture regarding studio flat value growth. While some areas show positive trends, others reveal concerning patterns:
In prime London locations, research from LonRes shows that after values fell in 2020-21, studios rebounded with an 11.7% increase to their high point in July 2022, actually outperforming larger flats which saw a 9% increase during the same period. JLL data also indicates that the number of studio flats sold between January and September 2024 was 11% higher than during the same period in 2019.
Regional cities show varying performance:
Liverpool studio flats saw 5.2% growth in 2024
Manchester studios increased 11.3% in value
Nottingham prices rose more modestly at 1.6% annually
Sheffield maintained steady 2.1% year-on-year price growth
However, numerous real-world examples show studios struggling to maintain their value:
Many buyers who purchased studio flats around 2016 (particularly in London) have experienced significant depreciation. One Reddit user described buying a London studio for £400,000 in 2016 that’s now worth considerably less. Property experts describe 2016 as “peak froth” for the flat market, especially for new builds.
The challenges for studio flat appreciation include:
Limited buyer pool: Studios primarily appeal to single people or investors, restricting potential demand when selling.
Practical limitations: Studios lack separate living spaces, making them less suitable for couples, families, or remote working – a significant factor post-pandemic.
Financial factors: Higher service charges relative to property size, potential leasehold issues, and mortgage lenders’ increasing caution about smaller properties create additional barriers.
Cyclical vulnerabilities: Studio and one-bedroom flats are typically “hit hardest with market crashes” as first-time buyers struggle with financing during economic downturns.
The specific characteristics of a studio flat greatly influence its value trajectory. Properties with more favourable features tend to perform better:
Share of freehold or long lease terms
Low service charges
Good transport links
Proximity to universities or employment centres
Energy efficiency
While general property market trends show flats increasing in value by approximately 60% over the past decade (about £730 monthly), these figures include all flat types, not specifically studios. For comparison, many industry experts observe that studios “typically do not yield significant capital appreciation” compared to larger properties.
For potential investors, studio flats offer rental yields between 5-10% in cities like Manchester, Nottingham and Sheffield due to strong demand from students and young professionals. However, this rental return should be balanced against potentially weaker capital growth compared to larger properties.
If you’re considering selling a studio flat that isn’t appreciating as expected, options include waiting for market conditions to improve, converting to a rental property (where allowed), or working with cash buyers who understand the unique challenges of studio properties.
Selling a Studio Flat at an Auction
One option for selling your studio flat is through an auction.
You can consider auctioning your property, but be prepared to put in a low guide price to entice buyers. With auctions, there’s no guarantee of a sale because you might pick an auctioneer who can’t perform.
There are several non-refundable fees to be paid upfront, including:
- Auction entry fee – £500
- Preparing legal pack – £1,000
- Paying for searches – £300.
In theory, selling through an auction has the advantage of working with experienced auctioneers who have sold various types of properties, including studio apartments.
However, picking the wrong type of auction or poor-performing property auctioneer can be costly.
There are some additional risks to consider:
Auction Risks
Description of Risk
Waiting time
Selling through an auction involves a significant amount of waiting. If you’re eager to sell your studio flat quickly, this may not be the best option, as it could take weeks or even months for the next auction to take place.
Additionally, even after the auction is complete, there is still a waiting period for the paperwork to be processed, which can take a month or more.
Auctioneer’s commission
Another factor to consider is that auctioneers charge a commission to cover the costs of marketing and selling your flat.
This commission is charged regardless of whether completion takes place or not.
Estate Agents
When selling any property, most people think of using an estate agent.
Estate agents handle all the responsibilities of selling your home in exchange for a commission. One major advantage of selling your studio flat through an estate agent is that they will do all the hard work for you, including creating and advertising a property on the Rightmove portal.
However, a downside of selling through an estate agent is that it can be time-consuming. You will need to schedule house viewings for potential buyers, which can be lengthy and inconvenient.
This means taking time off from work and ensuring any issues with the house are fixed. And even after a viewing, there’s no guarantee of finding a buyer, so you may have to repeat the process.
Another drawback of selling your studio apartment through an estate agent is that it can take months to find a buyer on the open market, especially since studio apartments are challenging to sell even in a good market.
Remember that on top of estate agency fees, you must pay legal fees and removal costs, which can eat away at your equity.
Sell a studio flat for cash
Another option for selling a studio flat is through a genuine cash buyer. Selling to a cash buyer ensures a guaranteed sale of your house. Unlike other buyers on the open market, cash buyers are not deterred by the challenges of selling a studio.
Another advantage of selling to a cash buyer is that you can secure a sale within a timeframe that suits you. If this sounds appealing, look no further because we are here to help!
At Property Saviour, we are cash buyers who purchase any house in any location and work on a timeframe that suits you. Plus, we cover all the fees, including the legal ones! We only require one quick viewing to ensure our cash offer is accurate.
As genuine cash buyers, you receive the full amount in your bank once you accept our offer. So, if you’re ready to sell your studio apartment, give us a call or fill in our callback form for a free, no-obligation cash offer that could be in your bank as soon as you choose.
Here’s why sellers trust us:
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
