A property described as London’s smallest flat allegedly has a rental yield of 10 per cent – yet it cannot be mortgaged.

The newly renovated converted Victorian studio in Hackney measures just 75 square feet. 

The first floor flat has room for a captain’s-style bed with cupboards and shelves, a microwave underneath and space for a fridge, fold out table, sink and separate private bathroom.

My Auction, the online auction house which sold the property, claims that at the sold price of £90,000, the property would provide a rental yield of 10 per cent a year.

But the company says that because of its size the flat cannot be mortgaged.

The flat comes with a long leasehold of 994 years.

My Auction director Stuart Collar-Brown says: “This property has attracted a significant level of attention, largely from buy to let investors who recognised the substantial return potential. 

“The flat might be small, but its highly functional and with such disparity of good quality stock in the rental market and the number of potential tenants, properties like this don’t hang around for long.”