Big considerations when buying micro-properties
With house prices soaring, many are forced to think small when buying their own place, but bijou is not necessarily the wisest option
As TVs get bigger, our homes become smaller. The UK has some of the tiniest rooms in Europe – and for some the whole flat could be less than the square footage of a London underground carriage.
Welcome to the micro-property – that’s anything under 37 square metres, the minimum size for a studio flat under national standards. But these standards are not legally binding – councils have little choice but to allow developers to offer micro homes to meet housing shortages.
Rocketing prices, pressure on land and lifestyle changes such as a growth in one-person households, and wanting to live in city centres, are all behind the rise of the micro-property. Many are in London, but Leicester, Liverpool, Cambridge, Bristol and other urban areas have them as well.
Which? looked at Land Registry data showing a record almost 8,000 micro-properties were built last year. Builders can use “Permitted Development Rights” to convert unwanted offices into micro-properties without planning applications.
Many are well designed with communal laundries and gardens. But some are badly constructed – featuring toilets in the kitchen and showers in the living room.
Which? found former offices sliced up into flats of just 16 square metres – smaller than a Sumo wrestling ring. The very smallest, in Brent, London, were 8 square metres, just a little bigger than a prison cell. Brent council has now ordered this development to be reconverted into a family house.
Which? warns that even those happy about living in a tiny home need to be looking at micro-property prices and lender attitudes to mortgages. Price drives buyers to micro-properties – either as owner-occupiers or as investors. The average in London last year was £279,000 – under half the typical London home which cost £580,000. But the tiniest homes have not gone up as fast as other housing in the capital – a gain of 5.4% from 2013 to 2016 against 14.5% for larger homes.
One reason for the slow growth is difficulty finding a mortgage.
Which? spoke to a number of major lenders. Most would base a decision on “professional valuations”. But Nationwide and Royal Bank of Scotland (including NatWest) refuse to lend on anything under 30 square metres. RBS said smaller properties run the risk of “volatile pricing on resale”.
David Blake at Which? Mortgage Advisers added: “Speak to an independent mortgage advisor and think about whether it will be easy to resell the property – will demand remain strong?”