Mortgages for Flats

If you’re looking to buy a flat, you’ll find that getting a mortgage can work a little differently from purchasing a house. Flats come in many forms, and each has unique lending criteria. Here, we’ll explain how mortgages for flats work, how the type of flat affects your options, and what lenders look for when assessing flat mortgages.

Are there specific mortgages for flats?

Most lenders don’t have specific flat mortgage products, but what you’ll find is that certain terms and restrictions apply to flats within the standard residential or buy-to-let mortgage property criteria. However, some types of flats will fall under specialist lending criteria, requiring a more tailored approach.

The building’s height, construction type, location, or whether the property is leasehold or freehold can all influence which lenders will consider your application and how much they’ll let you borrow. Understanding these nuances early can save time and help you target the right mortgage from the start.

How to get a mortgage to buy a flat

Getting a mortgage on a flat can be straightforward with the proper preparation and advice. Here’s how to improve your chances:

1. Work with a specialist broker: They can identify lenders who are comfortable with your specific type of flat, whether it’s new-build, ex-council, something above commercial premises, or any other property.

2. Check lease details: Make sure the lease length, ground rent, and service charges meet lender criteria before making an offer. Your broker can advise you on this.

3. Gather supporting documents: Include proof of income, ID, deposit source, and any relevant lease or management company details.

4. Address potential issues upfront: Obstacles like cladding, short leases, or non-standard construction should be well understood before you apply.

5. Apply to the right lender: Depending on your flat type, some lenders will be more suitable than others. Your broker can introduce you to the best option from the get-go.

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How each type of flat affects your mortgage options

Here’s how lenders treat various types of flats.

Freehold flats

Freehold flats are rare and can be difficult to mortgage because there’s no shared legal structure to manage the building’s maintenance or communal areas. Some lenders avoid them altogether, as there’s no formal agreement ensuring the building is insured or maintained.

If you do find a lender willing to consider a freehold flat, you’ll likely need to prove there’s a joint maintenance agreement in place between the shared flat owners and may require a larger deposit, typically 25% or more.

Studio flats

Studio flats can be eligible for a mortgage, but the exact size and floor plan can make a difference. Typically, most mainstream lenders won’t consider properties smaller than 30 square metres, but others may only consider properties 50 square metres or more.

These size limits will usually apply to both residential and buy-to-let mortgages, and you may need to approach a specialist lender for studio flats on the smaller side, provided the flat is well located or easily lettable. Lenders also prefer studios in established blocks, not conversions, as these are easier to sell and value.

Flat above a shop

Flats above a shop or next to commercial premises (such as takeaways, pubs, or newsagents) are often considered higher risk because of noise, smells, and potential fire hazards.

Many high street lenders will decline these properties outright, but some specialist lenders will consider them on a case-by-case basis. However, you can expect stricter criteria, manual underwriting, and usually maximum loan-to-value (LTV) limits.

High-rise flats

Mortgages for high-rise flats - usually defined as buildings of six or more storeys - can be more restrictive. Some lenders limit lending to flats below a particular floor level, or only consider those with valid EWS1 fire safety certificates where cladding is present.

Mortgages for high-rise flats with cladding have become more difficult to obtain in recent years, but the building’s management, construction quality, and service charges will also influence approval. Specialist lenders or building societies often offer the best options here.

New-build flats

Lenders typically view new-build flats as higher risk due to the potential for overvaluation or rapid depreciation, given the “new” premium that applies only to first-time buyers. As a result, they often require larger deposits due to lower LTV limits.

Deposits can be around 25% for buy-to-let and 15% to 20% for residential purchases. Some developers offer incentives or shared ownership schemes, but lenders will still assess these carefully to ensure affordability and fair value.

Ex-council flats

Ex-local authority or ex-council flats can be good value, but not all lenders accept them, especially if they’re in high-rise blocks or areas where the council still owns part of the building.

Approval on mortgages for ex-council flats often depends on the building’s construction type, location, and the ratio of private to council-owned units. Flats in predominantly private blocks are generally easier to mortgage.

Basement flats

You can get a mortgage for basement flats, but lenders will assess them carefully due to potential issues with damp, ventilation, and natural light. Properties that are fully compliant with building regulations, have proper waterproofing, and include adequate escape routes are more likely to be accepted.

Lenders may also consider the flood risk and whether the flat is a conversion or purpose-built. Because basement flats can be harder to sell, some lenders will limit LTV ratios or request a specialist valuation. For leaseholds, it’s important that the lease clearly outlines responsibility for waterproofing and structural maintenance.

Buy-to-let flats

If you’re buying a flat as an investment, you’ll need a buy-to-let mortgage. Lenders will base affordability on expected rental income, usually requiring rent to cover around 125% to 145% of your monthly payments.

Buy-to-let flat mortgage lenders also prefer properties that are easy to rent and manage, so they may avoid flats with short leases, cladding issues, or high service charges.

Other eligibility criteria for flats

Beyond the property type, lenders will look at other key factors when deciding whether to approve your flat mortgage:

• Deposit and LTV: Expect to provide at least a 5% or 10% deposit for residential flats and 20% to 25% for buy-to-let or more complex properties.

• Lease length: For leasehold flats, most lenders require at least 70 years remaining on the lease at application (and often 85+ years for buy-to-let).

• Property condition: Flats must be habitable, structurally sound, and have adequate home insurance. Non-standard construction flats can be more difficult to get a mortgage for.

• Income and affordability: Lenders will check your income, debts, and credit history to ensure repayments are affordable (depending on the type of mortgage).

• Service charges and ground rent: High service charges or escalating ground rent clauses can affect mortgage approval or the maximum amount you can borrow for a flat.

Best lenders for flat mortgages

Several popular UK mainstream lenders offer mortgages for flats, though their criteria vary by property type. Here are a few examples:

• Nationwide: For non-new-build flats, Nationwide offers up to 95% LTV for purchases (90% LTV for remortgages), provided there’s at least 90 years left on the lease. Former local authority flats over five storeys won’t be accepted, and there are lots of specific eligibility criteria for flats in the same block as commercial premises, largely relating to access and the type of business.

• Barclays: Although Barclays will consider some types of flats, it will automatically decline freehold flats and maisonettes. For flats over shops (or commercial premises) and high-rise blocks of flats, each application will be considered on its own merits and assessed.

• Halifax: Will consider leasehold flats with more than 70 years remaining on the lease, but Halifax won’t lend on freehold flats across the UK (apart from Scotland). There’s no specific policy for flats above shops; each case will be evaluated individually.

Because lender criteria vary, working with a specialist broker can help you match your property type with the most suitable provider and avoid unnecessary declines.

Use our free mortgage sourcing tool below to compare the latest rates from these lenders are more.

Leasehold vs. freehold flats

Most flats in the UK are leasehold, meaning you own the flat for a set period of years, but not the underlying land or building structure. The freeholder owns and maintains the building and then charges ground rent or service fees.

Some lenders are cautious with shorter leases, particularly those under 80 years, as they can affect the resale value of your flat. Extending the lease before applying can improve your chances of approval.

Freehold flats, as mentioned earlier, are much harder to mortgage because of the lack of a formal management structure. In nearly all cases, leasehold ownership with a clear maintenance agreement is actually preferred (even though it comes with its own downsides).

Getting a mortgage on a block of flats

If you’re purchasing an entire block of flats or student accommodation, for example, to rent out multiple units, you’ll usually need a commercial mortgage or multi-unit freehold mortgage (MUFB).

These products are tailored for landlords or developers who own multiple units in a single building. Affordability is typically assessed based on the combined rental income, and you’ll need a substantial deposit.

Some lenders may allow you to hold multiple flats in a single block under a single buy-to-let portfolio arrangement, but this depends on the size and setup of the property.

Why choose Money Helpdesk for your flat mortgage?

We specialise in helping buyers and investors find mortgages for all types of flats. If your property falls outside standard lending criteria, our brokers know which lenders are most open to flat mortgages and how to present your case effectively.

Here’s why people across the UK choose Money Helpdesk to get the best deal for their flat mortgage:

• Access to brokers who specialise in mortgages for flats

• Your first chat is free and with no obligation to proceed

• Our advisors are 5-star rated on leading review platforms

• Introduction to lenders offering tailored mortgage deals for flats

If you’d like to compare the latest rates online for free or speak with an experienced broker who specialises in flat mortgages, you can get started here.