A growing number of flat owners are finding themselves in a difficult position, having to sell their homes for less than they originally paid. The appeal of single-storey living appears to be diminishing, with many buyers showing a stronger preference for houses instead.
Recent figures released by estate agent Hamptons, and shared exclusively with This is Money, reveal that so far in 2025, 22 per cent of flat sellers have made a loss on their property. This is more than double the rate seen across the wider housing market, where most sellers still tend to achieve gains.
The situation is particularly pronounced in London. Separate data from analytics firm Property Data shows that almost a quarter — around 24 per cent — of flats sold in the capital between October 2024 and June 2025 were resold for less than their purchase price.
Government data highlights just how significant this trend could be, with more than six million flats and maisonettes spread across England and Wales. Traditionally, these homes played a crucial role in the housing market, acting as a stepping stone for young first-time buyers and a practical downsizing option for retirees.
Landlords, too, once viewed flats as attractive buy-to-let investments. Compact, often located in city centres, and usually easier to manage than large houses, flats provided a solid income stream. Yet many who bought into this market in the past decade may now feel the investment hasn’t lived up to expectations.
One of the main reasons flats are struggling is the widening gap between their prices and those of houses. In 2015, Zoopla reported the average flat cost £161,000 compared with £218,000 for a house — a gap of £57,000. At that time, flats were still considered an affordable alternative.
Fast forward ten years, and the numbers look far less balanced. Today, the typical flat sells for around £191,000, while the average house commands £321,000. The difference has now widened to £130,000, meaning houses have pulled significantly ahead.
In percentage terms, the divide has grown from 30 per cent in 2015 to 51 per cent in 2025. This marks a sharp change in affordability dynamics, leaving many flat owners struggling to keep pace with rising house values.
Recent statistics from the Office for National Statistics (ONS) reinforce this shift. Over the past year, the price of an average flat or maisonette has increased by only 0.3 per cent. In contrast, terraced houses have climbed by 4.1 per cent, semi-detached homes by 5 per cent, and detached houses by 4.4 per cent. Clearly, demand for houses is outstripping demand for flats.
“Flats have had a tough run in recent years, shaped by a mix of structural challenges and shifting buyer sentiment,” explained Aneisha Beveridge, head of research at Hamptons. Her comments highlight just how much consumer attitudes towards property have evolved.
Nationwide Building Society’s data offers further insight. While flats now make up a growing share of both social housing and private rentals — accounting for 42 per cent of the private rental market compared to 38 per cent in 2013 — they represent only 10 per cent of owner-occupied homes. Semi-detached houses, by comparison, make up almost 30 per cent of this segment.
The costs associated with flats are also discouraging potential buyers. Service charges and ground rents remain a major sticking point. Although new leaseholds can no longer include ground rent, existing owners are still tied to these payments, while service charges are climbing rapidly.
According to Hamptons, the average annual service charge reached £2,300 in 2024, an 11 per cent rise in just one year. In some luxury developments, the costs are staggering. For example, a Canary Wharf duplex currently listed for over £1 million comes with an annual service charge of nearly £30,000, alongside a £700 ground rent.
Beyond financial issues, the sector has also been damaged by the cladding crisis and ongoing leasehold reform debates. Some of the reforms only apply to new leases, leaving older properties with outdated and often unfavourable conditions. This has created uncertainty and added stigma around leasehold flats.
The pandemic’s “race for space” trend only made matters worse. During lockdowns, buyers placed far more importance on outdoor areas, home offices, and larger living spaces, leading to greater demand for houses. As a result, flats lagged behind and have struggled to recover in value since.
Property experts suggest that affordability is another key factor. Instead of purchasing a flat as an initial step, many buyers now choose to wait longer, save more, and buy a house straight away. This shift means flats are no longer the default first rung of the housing ladder, but in some cases, a rung many are choosing to skip entirely.
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