Whether you’re a first time buyer or purchasing for an investment, buying a leasehold property can be full of many twists and turns, but deciding whether you should buy a 1 or 2 bed flat is where the decisions begin.
There are many advantages to buying a leasehold flat, they can be easier to maintain, generally considered cheaper to buy, and get onto the property ladder, and they’re great for buy to let opportunities, retirement homes and first time buys.
However, as a previous leaseholder of a one bedroom flat, I am privy to the information that the estate agents don’t want tell you. Here is an honest look at whether a 1 bed or 2 bed flat is better for you based on your circumstances.
The Pros of One Bedroom Flats
One bedroom flats are highly desirable for the right buyer, and if they are in the right location, here are some of the pros of buying a one bedroom flat.
- Low maintenance
- Smaller space is perfect for single person living, and it’s less council tax
- A one bedroom flat in a desirable location makes it easier to sell on to property investors, airbnb hosts, first time buyers
- Generally considered cheaper, easier way to get onto the property ladder
- Less monthly running costs
The Cons of One Bedroom Flats
- You don’t own the flat, you own a lease for the property – this is not exclusive to one bed flats, it’s all leasehold properties
- You can outgrow the space very quickly
- If you have a partner or want to start a family you’re going to have to consider selling up and looking for a bigger property
- They can be harder to sell than two bedroom flats, and harder to sell than a one bedroom freehold property
- Ground rent and service charges are the same cost whether you have a one bedroom, or two bedroom flat
- Natural inflation of one bed flats isn’t that high, there will be a cap for a one bedroom flat in the area
Are One Bedroom Flats A Good Investment?
One bedroom flats are generally considered cheaper, but they are only suitable for certain types of people which can mean more difficulty when selling.
However, a one bedroom flat in a desirable location will continue to rise with inflation as it is attractive to first time buyers, buy to let investors and airbnb hosts.
The one bed flat market can be less captive as it’s not suitable for growing families or couples.
It is often only attractive to first time, single buyers and buy to let investors for renting opportunities.
Is It Hard To Sell A One Bed Flat?
It is generally much harder to sell any leasehold flat, no matter the amount of bedrooms than it is to sell a leasehold house.
A flat can take anywhere from 12 weeks to over a year to go through. The reason the legal process take so much longer is because of the lease agreement.
The lease can create a number of queries from the purchasers side including ground rent terms, service charges and length of the lease.
Everything might be plain sailing, but if there are queries, indemnities or lease extensions that need to be carried out this can set the process back for months, and cost you thousands of pounds.
In terms of getting a buyer for a one bedroom flat, two bedroom flats usually sell quicker as they are considered more desirable than a one bedroom flat due to the size, whilst it’s more attractive to a number of different purchasers.
The Pros of Two Bedroom Flats
- Much more room – you can grow with a two bedroom flat if it’s just you at the beginning, you may find a partner, or want to start a family, and it doesn’t mean you have to move
- You can rent out the additional room for extra income
- Low maintenance over a house – everything is handled by the managing agents of the property
- Easier to sell than a one bedroom flat, more desirable to property investors and other buyers
The Cons of Two Bedroom Flats
- You don’t own the flat, you own a lease for the property
- Some 2 bed flats can be more expensive than houses, a freehold house purchase is much easier, and you don’t have to pay service charges or onerous ground rent levels
- Council tax is more for a two bedroom property
Are Two Bedroom Flats A Good Investment?
According to Property Investors Today, Zoopla’s yield data shows that 2-bedroom apartments outperform every other property type aside from 2-bedroom houses with an average rental yield of 5.16%.
This means that 2 bedroom flats are highly desirable to property investors who are looking to do a buy to let.
In terms of investment, if you are looking to buy for yourself to live in, it would still need to be in a desirable location, or in an up and coming area for the property value to increase considerably over time.
Mortgage lenders don’t base your affordability on the extra costs that come with a leasehold property (service charges, ground rent, section 20 notices) so you should get sight of at least the last 2 years of service charge accounts and really look into how affordable a flat will become monthly. My 2 bed house is cheaper to run and maintain per month despite it being more expensive than my 1 bed flat was.
Should I Buy A 1 Bed or 2 Bed Flat?
When I was a first time buyer I was confronted with buying a lovely 1 bed flat, newly refurbished and in a highly desirable location, or getting a 2 bed flat or house in a really run down area, and I would need to renovate the property too.
This is a common situation to be considering if you’re a single, first time buyer.
I went with the 1 bed flat in a desirable location because I wanted to be able to move straight in, enjoy the area, and I actually didn’t need any extra space at the time.
It’s important to remember that any interior can be renovated well and look amazing inside, but you can’t change the area.
You do need to also think about the resell value.
Flats in nice areas will usually go up with general inflation. There will also always be a market for a 1 bedroom flat in a lovely location as it appeals to professionals, first time buyers, buy to let investors and airbnb rentals, whereas there isn’t such high demand for a 1 bedroom flat in a not so nice location.
When it comes to buying the right flat, there may be an occasion where a 2 bed flat seems ridiculously cheap, and there is usually a reason for this.
If there is a short lease on the flat or onerous levels of ground rent, this is considered a lease defect and the property will be marketed at a lower price to shift it.
This information needs to be gained before putting an offer in as it is not worth a cheaper buy in price for the cost of a lease extension which can run into the value of thousands of pounds in the future.
There is no definite answer as to whether a 1 bed or 2 bed flat is a better option for you as there are pros and cons for both.
It ultimately does come down to personal circumstances, and your plans for the following few years, could you grow into it? Are you likely to sell and upsize in a short period of time?
But, you also need to think forward and the possible resell value, and how easy it will be to sell in the future.
A great location will instantly help, but the lease terms including how long the lease currently is and the ground rent levels will save you a headache in the future.
If you have any questions about leasehold not mentioned in this article, please leave me a comment below and I’ll come straight back.