banks won't lend for 1-bed apartments?

[legal33]

I've heard banks won't give out mortgages for 1-bed apartments because they are now considered 'toxic assets'. They encourage prospective purchasers to find a 2-bed. Is this true?

 

[Seiko]

I've heard banks won't give out mortgages for 1-bed apartments because they are now considered 'toxic assets'.

Why would this be? I would have thought 1 beds would be lower risk for banks if they are lending smaller amounts, and they tend to have a better rental return relative to larger properties.

Also, with rising unemployment demand for cheaper properties may increase as they will be all people can afford when they get back on their feet.

 

[obama]

The value of apartments and duplex apartments are falling faster than standard houses. With this in mind banks are reluctant to lend on apartments with some lenders having pulled apartments for their product range altogether.

 

[sandrat]

I guess with a 2 bed apartment you can always rent out a room to help with repayments if time gets tough.

 

[exbroker]

I think it may also have something to do with the resale target market - a one bed apartment may not have the appeal to a family that say a 3 bed semi would.

 

[minion]

I've heard banks won't give out mortgages for 1-bed apartments because they are now considered 'toxic assets'. They encourage prospective purchasers to find a 2-bed. Is this true?

Nonsense. Go in and ask them. Dont listen to us. Only the bank will tell you.