‘I’ve saved a 10 per cent deposit that finally allows me to afford a studio flat in
Studio and one-bed flats often bear the brunt of a housing slump by dint of simply being at the very bottom of the
When prices fall, first-time buyers try to see if it’s possible to "trade up" to get more for their money, says Richard Morea of the mortgage broker London & Country.
"If the fall is sufficient to bring one- and two-bed flats within the range of first-time buyers, the traditional first rung of a studio flat could be bypassed – putting further downward pressure on its value."
"If your property falls in value by more than 10 per cent, which is not unreasonable over the next two years, and you only had a 10 per cent deposit, your mortgage will be more than your property value and will create negative equity," she says.
If you were to keep on saving for longer, there’s a chance that property prices will fall as you build up a bigger deposit, says Mark Harris of the broker Savills Private Finance.
"This will then allow you to afford a larger property, but there is a big jump between the cost of a studio or one-bed flat, and a two-bed flat.