Flats Crisis – many sell at a loss
Summary
Repeat-sales analysis from e.surv Chartered Surveyors indicates that a significant share of flats resold in London and parts of southern England over the past year changed hands below their previous recorded purchase price, with the weakness most pronounced in London. The article links this divergence between flats and houses to building safety concerns, cladding, service charges and higher borrowing costs, while noting that Scotland’s flat market has been comparatively resilient.
Why it matters
Surveyors valuing flats need to be alert to the widening performance gap between flats and houses, particularly in markets where safety, tenure and service-charge issues are affecting buyer demand and lender appetite. The findings are relevant to valuation advice, comparable evidence and risk assessment for leasehold stock.
Key points
- Nearly four in 10 London flats resold after five to 10 years did so at a nominal loss.
- Around one-third of similar flats in the South East and East of England also sold below their previous purchase price.
- e.surv says flats and houses began diverging around 2017 as building safety, cladding and service charges weighed on the market.
- London is the only UK region currently showing annual house price decline in the article’s data.
- The Autumn Budget may include the new Your First Home equity-loan scheme, but details are still outstanding.
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