Is a studio flat a good investment?

With house prices falling and interest rates on new mortgage deals at their lowest level in 23 years, you may be tempted to jump on the property ladder. As the market continues to weaken and prices fall, studio flats become more a more viable option to a wider audience. But is purchasing a studio flat a wise investment?

Cheaper than One Beds

While cheaper than one-beds, compromising on space may not represent great value. Most estate agents now value properties on their price per square footage, which can make studios not so appealing. Location is vital when looking to invest in a studio flat, estate agents have reported some studio flats being on the market for years due to their postcode, while more desirable locations are snapped up straight away.

Limited Space and Limited Finance

As well as the lack of space there are some other drawbacks to consider. Properties with additional bedrooms provide you with the option to rent out rooms if you find yourself struggling to keep up with mortgage repayments. If you plan to let your studio then you should be aware that most tenants rarely stay for long periods and there may be times when it is left unoccupied. Remember that the property market will eventually pick up, meaning could become less desirable to future buyers.

Finance for a studio flat can also prove difficult. Lenders are not always keen to lend on studios. Getting finance often relies on the properties size, ideally your studio will need to be 380sqft before they will consider you for a mortgage. Part of this is the lenders concerns with your properties potential resale.

Location, Location, Location

Despite all of this, studios can still make a good buy-to-let investment if you have chosen the right location. Look for prime city sports with good access to transport links and restaurants. A recent survey showed that properties situated near Pizza Express and Star Bucks are worth more. There is as always still a strong demand for studio flats from tenants looking for easier commutes in to work or better locations to live.

Final Say

Studios tend to perform best for short-term lets. Location is key, look for up and coming areas that are attracting professionals who have more disposable income.  With all investments there is always risks, with the right research a studi flat could be the best buy for you.


Value My Property

The best way to value your property is to form your own opinion of what your home is worth. By following our steps you will see how to accurately do this and the truth behind estate agent valuations.

How does an estate agent value my property?

A common misconception is that estate agents have a special tool or qualification to value your home; this is simply not the case. Estate agents do not actually perform a property valuation; they just provide you with an ‘informal opinion’ of the value.

Estate agents will base their opinion on what similar properties in your area have sold for, but, there is nothing stopping you researching this same information.

If you have advertised through an estate agent before you may have learnt the hard way that they will often over value or under value your property. Agents will under value your property in order to sell your home quicker, meaning they get that all important commission. More often they will over value your property to ensure you sell through their agency and then recommend you lower the asking price after just several days.

What is my house worth?

It is vital you understand that what your property is worth has nothing to do with how much you paid for it, how much money you have spent on it or how much you would like to sell it for. The truth is what your property is actually worth is what a buyer is genuinely going to pay for it.

Once you understand this you can start to accurately value your property. This is done by researching two factors, what similar properties in your area are advertised for and most importantly selling for.

Research the market

You can find out what similar properties in your area have sold for from data stored at the governments Land Registry. Listed will be the actual price someone has paid for a property sold in England & Wales since April 2000.

You should be aware that the government only makes house prices available 3 months after the property has sold, so it is recommended that you only search properties from the last 6 months.

We recommend you use Zoopla for free access to this Land Registry data when you value your property.

You can also research what similar properties are advertised for by simply searching Private House Sales (insert URL) or any other major property website.

Ask an estate agent

Apply to a few of your local estate agents, if you express an interest in selling your home they will freely come and give you their ‘opinion,’ you will be under no obligation to sell thorough their agency.

Do not over value

It is easy to be tempted to over value your property, the hard truth is though, unless your home is competitively priced then it is unlikely to sell. You need to carefully research the existing market and then make an unbiased decision.

You’re now ready

By following our steps and researching the correct information you have seen how to value your property leading to a successful sale. Now you can form an accurate opinion on your home valuation and avoid those common tricks used by estate agents.