Lee Grandin, managing director of Landlord Mortgages commented:
“The UK is facing a housing crisis as there is a chronic lack of desirable residential property which is leading to significant price hikes and many consumers being priced out of the market. One of the ways that the housing industry is working to try and combat this problem is by building smaller units – thus the rise of the studio flat.
“This rise of the ‘mini-mansion’ has trickled down to the buy-to-let market and we have seen a 126% increase in the number of investment properties which are under 25 square metres in size. We believe that this trend is set to grow and will continue over the coming years as builders realise the advantages of building smaller more ‘cost effective’ properties.
“Despite the move towards smaller homes, landlords who attempt to purchase a ‘petite property’ often have difficulty finding a lender as many companies will not lend on flats under 25 square metres in base size. This short sighted approach to financing means that investors are missing out on potential buy-to-let bargains.
“We urge lenders to react to the need in this market and enhance their lending criteria to take into account the re-saleability of the property rather than just the size. When it comes to buy-to-let, size shouldn’t always matter.”
