Flat values lag as buyers shun single-storey living

A growing share of flat owners in England and Wales are being forced to sell for less than they paid, as buyer demand shifts towards houses and away from single-storey living, new market data show.

Exclusive figures from estate agent Hamptons indicate that in 2025 to date 22% of flat sellers have realised a loss on their purchase price — more than double the rate seen across the wider market. Separate analysis by Property Data found that 24% of flat sales in London between October 2024 and June 2025 were below the price at which the properties were originally bought. There are more than six million flats and maisonettes across England and Wales, according to government records.

The decline in flat values is part of a widening long-term gap between flats and houses. Zoopla data show the average flat price rose from £161,000 in June 2015 to £191,000 a decade later, while the average house increased from about £218,000 to £321,000 over the same period. That expanded the typical house-flat differential from roughly £57,000 in 2015 to about £130,000 in 2025 and pushed the flat-to-house price ratio from about 1.35 to nearly 1.7.

Official statistics and industry measures point to weak recent growth for flats compared with broader housing stock. The Office for National Statistics reported that average prices for flats and maisonettes in Britain rose just 0.3% in the past year; terraced houses rose 4.1%, semi-detached homes 5.0% and detached homes 4.4%.

Analysts and agents cite a combination of structural issues and changing buyer priorities as drivers of the slump. "Flats have had a tough run in recent years, shaped by a mix of structural challenges and shifting buyer sentiment," said Aneisha Beveridge, head of research at Hamptons. Concerns over high service charges, legacy leasehold terms and safety remediation costs have dented appetite for some apartment types, particularly leasehold blocks.

Service charges have emerged as a significant deterrent. Hamptons reported the average annual service charge for a flat in England and Wales reached about £2,300 in 2024, an increase of 11% year-on-year. Agents point to examples in major cities where charges run far higher; one Canary Wharf duplex currently marketed with an asking price above £1 million reportedly carries a service charge of £29,760 a year alongside a £700 ground rent, according to listing information.

The combination of those running costs and high profile leasehold problems — notably cladding remediation and uncertainty around the pace of legal reforms — has fuelled a stigma around some flats. "Flats have become a bit of a victim area of the market," said buying agent Jonathan Hopper. "Anything forming a leasehold property has picked up stigma in recent years. This is particularly the case due to cladding issues and the leasehold reform act and the uncertainty caused."

The pandemic-era "race for space" also altered buyer priorities. Lockdown-led demand for larger homes with gardens shifted preferences away from apartments, a change that has proved persistent even as activity normalised. "The value of flats has under-performed the market for houses as buyer preferences have changed, with greater prioritisation of space and more awareness of running costs," said Richard Donnell of Zoopla.

Affordability and tax rules have had a secondary effect. Prospective buyers are often saving longer to buy a home they can grow into, rather than using a flat as a stepping stone. Stamp duty considerations and the high cost of moving have contributed to some purchasers bypassing apartments and buying houses as their first home. "First-time buyers are now typically purchasing later in life and want homes they can grow into, not out of," Beveridge said. "That desire to 'future proof' — and avoid the cost and hassle of moving again soon — means flats are no longer the default first step onto the ladder."

New supply and shrinking flat sizes are compounding the problem. Nationwide Building Society analysis shows the average floor area of a flat is 1.7% smaller than a decade ago at about 60.3 square metres, while average property sizes overall have edged up. At the same time investor demand for flats has cooled: Hamptons found landlords bought 25% of flats sold in 2015 but just 14% so far this year.

Market consequences for sellers include longer sale times and deeper discounts. Hamptons reported that the average flat takes about 20 days longer to sell than the average house, and in July flats achieved 93.9% of their initial asking price compared with 95.7% for houses. Flats have sold at larger discounts than houses since 2017, the firm said, and that pattern has persisted.

Regional variations remain pronounced. The price gap between flats and other housing tends to be narrower in inner-city areas where apartments dominate and some large lateral units and penthouses command premiums. In Tower Hamlets, for example, the average flat price was only about 3% below the wider local market; in the City of Westminster flats were roughly 11% lower. Across London, however, the average price of a flat or maisonette was about £443,000 — virtually unchanged since early 2017 — while terraced house prices rose nearly 20% in the same period.

Outside cities, flats commonly take the form of conversions and typically trade at larger discounts to the local average. In Breckland, Norfolk, the average flat sold for about £115,200 compared with an average property price of £277,560, a gap of 58%.

Industry participants said the picture will matter for homeowners, landlords and buyers weighing mortgage decisions. With mortgage rates and lender criteria continuing to shape housing affordability, advisers recommend that homeowners and prospective buyers review options early. Borrowers whose fixed-rate deals are ending, or who are completing purchases, are advised to compare rates, consult brokers and consider locking deals ahead of need. Buy-to-let landlords, particularly those with interest-only loans, face larger monthly cost rises and have a higher incentive to plan remortgaging sooner.

While flats remain an important part of the UK housing stock, from inner-city family apartments to retirement options and social housing, current data suggest their relative appeal has softened. The market outcomes — slower sales, deeper discounts and a rising share of transactional losses — highlight how shifting preferences, running costs and legacy leasehold issues are reshaping demand within the housing market.