Securing a mortgage on a studio flat below 30 square meters is one of the more common sticking points for experienced buy-to-let investors. Most mainstream lenders apply a blanket minimum floor area — and when a property falls short, even by a matter of square metres, the application rarely gets off the ground. When an investor in the Surrey district bordering South West London identified a studio flat in Thames Ditton at £150,000, measuring 28.1 square metres, the opportunity was clear. Getting it financed was another matter.
What was the situation?
The investor had identified a studio flat in Thames Ditton priced at £150,000. The property was well-located, in good condition, and would generate solid rental income relative to the purchase price. She intended to borrow £112,500 and had a clear, considered plan for tenancy and yield.
Her income came entirely from rental income across an existing property portfolio. She operated as a self-employed landlord, with accounts prepared annually and rental income declared through self-assessment. There was no salary, no trading business, and no other income stream — just a well-evidenced, consistent rental income that had been built up over time.
What was the challenge?
The first obstacle was the property itself. Most buy-to-let lenders impose a minimum internal floor area for studio flats, typically 30 to 35 square metres. At 28.1 square metres, this property fell below the threshold applied by the majority of mainstream buy-to-let lenders. It did not matter that the flat was well-presented, well-located, and let-able — a blanket policy is a blanket policy, and the size alone was sufficient to trigger an automatic decline from most lenders approached at face value.
The second obstacle was income. While rental income is acceptable to many lenders in principle, it requires a lender comfortable with self-employed earnings derived from property rather than a trading business or professional practice. Some lenders exclude rental income altogether when assessing affordability for additional buy-to-let purchases, on the basis that they prefer salary, dividends, or trading profit as the qualifying income source.
The property was viable. The borrower’s income was verifiable and consistent. The challenge was finding a lender whose criteria allowed for both simultaneously — a non-standard floor area and a self-employed income structure built entirely around a rental portfolio.
What did Oakstead Finance do?
Oakstead Finance approached lenders known to take a more considered, case-by-case view on studio flats — particularly where the property sits in a strong rental area and the size reflects local market norms rather than poor design or an unletable layout.
The case was prepared with supporting evidence: a rental valuation showing comparable properties in the area, a detailed breakdown of the investor’s rental income across her wider portfolio, and a clear demonstration that the property met all other standard lending criteria, including tenure, construction, condition, and location. The strength of the case was built around what could be evidenced, not what was assumed.
A specialist buy-to-let lender was identified that does not apply a blanket minimum floor area policy for studio flats. Instead, that lender assesses each property on its rental viability and marketability within the local market. Critically, the lender was also comfortable with rental income as the sole source of self-employed earnings, provided it was properly evidenced through tax returns and supported by tenancy agreements — both of which were available and in order.
The case was submitted with full documentation, and the lender issued a formal mortgage offer 13 working days later.
What was the outcome?
The investor secured a two-year fixed rate at 3.59%. The loan completed, and the property was tenanted shortly after. She now holds a studio flat that performs well within the local rental market and was financed on terms that reflected the genuine strength of the case, rather than the limitations of a standard lending policy.
