Recent data from Nationwide reveals that flats have fallen in value by an average of 0.9% over the past year.
This decline is in contrast to other property types, which have continued to see modest growth over the same period. Semi-detached homes, for example, rose by 2.4% on average, while detached houses increased by 2.2%, and terraced properties went up by 1.8%.
Robert Gardner, Nationwide’s chief economist, highlights that flats have consistently lagged behind other property types in terms of growth.
He points out that over the last ten years, a typical flat has increased in value by around 18%, which is less than half of the 41% rise experienced by terraced houses during the same period.
Gardner explains that regional factors play a significant role in this performance. London, which has a higher proportion of flats than other areas, has underperformed compared with the wider UK property market over the past decade.
The pandemic has also influenced property trends, with many buyers shifting their preferences towards homes offering more space. This change in demand has affected flats more than other types of properties.
Although some of this trend has reversed since the height of the pandemic, the preference for larger homes has not fully returned to pre-pandemic patterns.
Other factors affecting the flat market include rising maintenance costs, higher ground rents, and increased service charges, all of which can deter potential buyers.
Nationwide’s data also highlights a wider slowdown in the UK housing market. House prices fell in December compared with November, slowing the pace of annual growth to its lowest level in 18 months.
In December 2025, prices dropped by 0.4% month-on-month, while the annual growth rate slowed from 1.8% in November to just 0.6%, marking the weakest increase since April 2024.
One reason for the slowdown is that house price growth was unusually strong a year ago. In December 2024, prices had risen by 4.7%, which makes the recent decline appear sharper in comparison.
Despite these slower figures, Gardner emphasises that the UK housing market remained resilient throughout 2025.
He notes that even though consumer confidence was subdued, and households were cautious about spending, mortgage approvals stayed close to pre-Covid levels.
Mortgage rates, which are currently around three times their post-pandemic lows, may have influenced buyers’ decisions, but they have not completely stalled market activity.
Overall, while flats have underperformed compared to other property types, the broader housing market shows signs of stability, reflecting underlying demand and the resilience of UK property values in challenging conditions.
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