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Are London flats still losing value?

Are London flat prices still falling right now?

Yes. London flats are still losing value today, and they remain the weakest major property type in the capital.

The latest HM Land Registry figures put the average London flat or maisonette at about £431,000, down 4.7% from £452,000 a year earlier. London property overall fell 2.5%, so flats are dropping almost twice as fast as the wider market.

The comparison with houses is even clearer. Semi-detached London homes were 0.6% more expensive than a year earlier. Terraces were down only 0.3%, while detached homes fell 0.7%. Flats were the obvious outlier at -4.7%.

The previous official release had London flats down 6.6% year on year, so the latest number is less bad. But we would not call that a recovery yet. London as a whole has now recorded ten consecutive months of annual house-price declines, and the Office for National Statistics says Inner London has been the main reason.

Private-market data tell a similar story from a different angle. Zoopla currently estimates that a London flat takes about 45 days to sell, compared with 37 days for a house. Buyers are showing the same preference through both price and selling time.

London property type	Average price	Annual change
Flat / maisonette	£431,000	-4.7%
Terraced	£641,000	-0.3%
Semi-detached	£722,000	+0.6%
Detached	£1.162m	-0.7%
All properties	£554,000	-2.5%

Have London flats really gone almost nowhere for ten years?

Yes. The bigger problem with London flats is not this year's fall but the fact that owners have already endured roughly a decade of almost zero nominal price growth.

HM Land Registry valued the average London flat at around £426,000 in mid-2016. Today the figure is about £431,000. We are talking about roughly £5,000 of nominal appreciation in around ten years, barely more than 1%.

London houses followed a completely different path. A typical terrace moved from about £503,000 to £641,000 over roughly the same period, an increase of around 27%. Semi-detached values rose from approximately £586,000 to £722,000, around 23%.

That gap also captures what happened after the pandemic. Buyers became willing to pay far more for extra bedrooms, gardens and home-office space, while the old premium for living very close to the office weakened. Hybrid working did not kill demand for flats, but it helped make houses relatively more valuable.

Zoopla's latest national analysis reaches the same conclusion over a broader sample. UK house prices have risen about 43% since 2016, while flats have gained only 10%.

London flat owners have therefore missed much more than one recent housing rally. They have missed most of a decade of growth enjoyed by houses.

London property	Around mid-2016	Latest	Approx. nominal change
Flat / maisonette	£426k	£431k	+1%
Terraced	£503k	£641k	+27%
Semi-detached	£586k	£722k	+23%
Detached	£914k	£1.162m	+27%

Are London flats doing worse than flats elsewhere in England?

Yes. Flats are weak across England at the moment, but London flats are falling roughly twice as fast.

According to the latest Land Registry figures, the average flat or maisonette in England fell 2.3% year on year. London flats dropped 4.7%.

Zoopla's more recent market index also finds flats to be the only major UK property type currently losing value, while detached, semi-detached and terraced houses remain positive nationally.

There are really two problems layered together. Flats themselves have become less attractive relative to houses, and London is one of the places where that shift is most severe.

The scale of the longer-term change is striking. Zoopla calculated that the average British house now costs 1.7 times as much as the average flat, the widest gap in its 30-year dataset. In London, its April figures put the average flat at £416,000 and the average house at £809,000, a ratio of 1.9 times. Ten years earlier that London ratio was roughly 1.5.

Scotland provides a useful contrast. The house-to-flat ratio there has barely moved, from around 1.8 to 1.9 over the decade. Scotland does not use the same long-leasehold structure found across England, which makes leasehold hard to dismiss as part of the explanation.

Is central London making the flat crash look worse than it really is?

Yes, substantially. London's average flat decline is being dragged down by some extraordinary falls in expensive Inner London markets.

Westminster is the clearest example. The latest ONS figures put the average Westminster flat at roughly £758,000, down 25.7% in one year. In Kensington and Chelsea, the average flat fell 15.3% to about £992,000.

Tower Hamlets, another flat-heavy market, has also been hit hard. Overall property prices there were down 13.1%. Hammersmith and Fulham fell 13.3%, Islington 8.1% and Camden 7.1%.

Travel farther out and the map changes quickly. Barking and Dagenham was up 4.3% overall, Havering 3.9%, Redbridge 3.6%, Kingston upon Thames 2.9%, Haringey and Waltham Forest 2.5%, while Lewisham was slightly positive.

That does not mean flats in every rising borough are rising too, because borough-wide figures mix property types. It does tell us something important about geography: today's London decline is heavily concentrated in Inner London rather than spread evenly across the capital.

London area	Latest annual price change, all properties
Westminster	-25.4%
Kensington & Chelsea	-14.7%
Hammersmith & Fulham	-13.3%
Tower Hamlets	-13.1%
Islington	-8.1%
Camden	-7.1%
Barking & Dagenham	+4.3%
Havering	+3.9%
Redbridge	+3.6%

Why are Tower Hamlets and Canary Wharf flats struggling so much?

Tower Hamlets flats are currently struggling because buyers have a huge choice of similar leasehold apartments, and that makes price, service charges and building quality brutally important.

The latest ONS data put the average Tower Hamlets property at about £457,000, down 13.1% in a year. The average flat is around £439,000. First-time buyers paid about 13.3% less than a year earlier, while mortgage-financed purchases were down 13.1%.

That is unusually weak even for London.

The local housing stock helps explain why. Canary Wharf, Isle of Dogs, Blackwall, Poplar and parts of Bow contain large numbers of relatively modern apartment blocks. A buyer looking for a two-bedroom flat can often compare dozens of units with similar layouts, similar transport access and similar amenities.

When supply looks interchangeable, small financial differences become much bigger. One building charges £2,500 a year, another £5,000. One has a healthy reserve fund, another has major works coming. One has dozens of competing listings. Another rarely has anything available.

That competition is much harsher than for a good terraced house on a street where only one or two comparable properties may come up in a year.

Are service charges now a real problem for London flat prices?

Yes. London service charges are now high enough to change what buyers are willing and sometimes able to pay for a flat.

Hamptons' latest service-charge study found that the average leaseholder in England and Wales paid £2,405 a year in 2025, up 32.6% in five years. London is more expensive, and one in five London leaseholders in Hamptons' wider dataset was paying more than £4,000 a year.

Large blocks are particularly costly. Hamptons found average annual charges of roughly £2,606 in buildings with 20 or more flats, nearly twice the £1,309 average in blocks containing fewer than five.

Those recurring bills sit on top of the mortgage. A £5,000 service charge adds £417 a month to the cost of owning the property before council tax, utilities or maintenance inside the flat.

The effect also shows up when people try to sell. Hamptons has found that flats with service charges below roughly 1% of their property value are far more likely to find buyers than flats where the charge reaches 2% or more.

So when buyers discount an expensive block today, they are often making a fairly simple calculation rather than panicking about leasehold in the abstract.

Example flat value	Annual service charge	Monthly equivalent	Charge as % of value
£400,000	£2,000	£167	0.5%
£400,000	£4,000	£333	1.0%
£400,000	£6,000	£500	1.5%
£400,000	£8,000	£667	2.0%

Is leasehold still hurting London flat values?

Yes. Buyers still put a discount on leasehold flats today, especially when the lease comes with expensive or unpredictable building costs.

Zoopla's recent comparison is revealing. Four out of five flats listed for sale in England are leasehold, and a typical leaseholder in its dataset pays around £1,900 in service charges plus £200 in ground rent each year.

Flats also sell more slowly where the English leasehold system applies. Zoopla found that London flats currently take around 45 days to sell compared with 37 days for houses. Scottish flats, where ownership works differently, sell in roughly the same time as Scottish houses.

The government is trying to improve the system. Leasehold reform is supposed to make extensions easier and cheaper, reduce some ground-rent problems and eventually move more flats toward commonhold.

But a buyer looking at a London flat these days still has to inspect the actual lease, remaining term, ground-rent clauses, accounts, managing agent, reserve fund and planned works.

Future reform may remove part of the discount. It has not removed it yet.

If London rents are still rising, why are flat prices falling?

Because London rents are high enough to support demand for flats but not high enough to make every flat attractive once mortgage rates, service charges and other costs are included.

The latest ONS figures put London's average private rent at £2,317 a month, up 3% in a year. Tower Hamlets rents also rose 3%, reaching about £2,439.

Meanwhile, sale prices in Tower Hamlets fell 13.1%.

That combination is pretty revealing. Tenants have not abandoned these areas. The problem sits much more on the ownership side.

Take a £431,000 flat renting for £2,000 a month. Annual rent is £24,000, giving a gross yield of roughly 5.6%. Remove a £3,000 service charge and the gross return before any mortgage, maintenance, management, voids or tax falls to about 4.9%.

For a cash buyer that may still be workable. For a leveraged landlord borrowing at today's rates, the economics become much less exciting.

High London rents therefore put some support under flat prices, but they are clearly not enough on their own to make prices rise.

Are today's mortgage rates making London flats harder to sell?

Yes. Mortgage conditions have deteriorated again lately, and that hits the first-time buyers who normally provide much of the demand for London flats.

The Bank of England says the effective interest rate on newly drawn mortgages rose from 4.08% in April to 4.22% in May, 4.35% in June and 4.45% in July.

Quoted rates are higher for buyers with smaller deposits. Moneyfacts' latest averages put a two-year fix at about 5.11% with a 40% deposit, 5.48% at 75% loan-to-value, 5.64% at 85% and just over 6% at 95%.

Demand has weakened at the same time. Mortgage approvals for house purchases fell to 56,100 in July, down from 58,200 one month earlier and below the previous six-month average of roughly 60,800.

For someone borrowing £350,000 over 30 years at 5.5%, the repayment is around £1,990 a month. Add a £300 service charge and the buyer is above £2,250 before council tax and utilities.

That monthly affordability test is particularly relevant for flats because first-time buyers are far more likely to depend on a large mortgage than wealthy central-London cash buyers.

Mortgage measure	Latest reading
Effective rate on new mortgages	4.45%
Average 2-year fix, 60% LTV	5.11%
Average 2-year fix, 75% LTV	5.48%
Average 2-year fix, 85% LTV	5.64%
Average 2-year fix, 95% LTV	6.09%
Latest house-purchase approvals	56,100

Which London flats are still most at risk of falling?

The riskiest London flats today are expensive-to-run apartments in buildings where buyers can easily find a substitute.

A modern high-rise with a £5,000 or £6,000 service charge, lots of identical units, major works ahead and unresolved building-safety questions has several problems working against the price at once.

Cladding and fire-safety issues deserve to be treated at building level now. The market is much less frozen than it was several years ago because mortgage availability has improved and remediation programmes have progressed. But unresolved façade work, unclear liability or an incomplete remediation timetable can still make one flat far harder to sell than another unit two streets away.

Large developments also face another problem: competition from themselves. If ten similar two-bedroom flats are already listed in the same tower, the cheapest motivated seller often sets the next comparable price.

The safer end of the flat market looks very different. Smaller blocks, converted houses, long leases or share of freehold, modest service charges, sensible reserve funds, good layouts, outdoor space and scarce residential streets are all easier for buyers to understand and harder to replace.

Today, building quality can matter almost as much as postcode.

Are new-build London flats still especially risky?

Yes. We would still be careful with generic new-build London flats because buyers can end up paying a premium that disappears as soon as the property becomes second-hand.

Knight Frank recorded only 5,933 London new-home sales during the first nine months of 2025, far below normal levels. Around 3,400 completed homes remained unsold, and more than 20,000 unsold units were still under construction.

At that sales pace, Knight Frank estimated roughly 38 months of new-home supply.

That inventory gives developers room to compete aggressively through discounts, stamp-duty contributions, furniture packages and other incentives. Someone trying to resell a three-year-old flat nearby does not have those tools.

There is also a problem with amenities. Concierge desks, gyms, lifts and landscaped communal spaces help sell a pristine new development, but the buyer pays for them every year through the service charge.

None of this makes every new build a bad purchase. A development bought at a sensible price in a location with limited future supply can work very well. The danger is paying a large premium simply because the flat is new.

Are London flats finally becoming cheap compared with houses?

Yes. After almost ten years of underperformance, some London flats now look genuinely cheap relative to houses.

The simplest comparison is the average London terrace. Around 2016, a typical flat cost about £426,000 and a terrace about £503,000. The gap was roughly £77,000.

Today, the average flat is about £431,000 while a terrace costs around £641,000. The gap has grown to roughly £210,000.

Zoopla sees the same pattern through a different dataset. Its latest London figures put flats around £416,000 and houses around £809,000, meaning a house costs roughly 1.9 times as much as a flat. Ten years ago the ratio was about 1.5.

Buyers are therefore getting a much larger financial reward for accepting apartment living than they used to.

That does not make a £450,000 flat with a £7,000 service charge cheap. But a £450,000 period flat with a long lease and £1,500 annual running cost looks much more interesting when the nearby house costs £700,000.

The discount has become large enough that we would no longer reject London flats as a category.

Will London's housing shortage eventually push flat prices back up?

Probably, although London's housing shortage looks more useful as a medium-term reason to own the right flat than as proof that prices have already bottomed.

New construction in London has collapsed.

Molior recorded only 3,248 private housing starts during the first nine months of 2025, which Knight Frank described as a historic low. Affordable housing delivery has also badly missed earlier ambitions, with London struggling to get anywhere near the number of homes implied by population and household demand.

The unusual part is timing. London still has thousands of completed and partly built new apartments competing for buyers today, while the amount that will arrive several years from now is becoming much smaller.

That could eventually turn today's oversupply in certain developments into a shortage of new stock.

Rental data already show the underlying demand. London rents remain above £2,300 a month on average even while purchase prices fall. If construction stays depressed and the population keeps growing, that pressure becomes increasingly difficult to absorb through rents alone.

We would therefore take the housing shortage seriously when buying for five or ten years. It is much less useful for predicting what a flat will be worth next year.

So, are London flats still losing value?

Yes. London flats are still losing value today, although the broad decline is increasingly hiding a much more selective market underneath.

The latest Land Registry data are clear: flats are down 4.7% year on year while London semis are slightly up and terraces are almost flat. Flats have also barely appreciated in nominal terms over roughly ten years, while houses have risen by more than 20%.

There is also genuine stress in specific apartment-heavy markets. Tower Hamlets is down 13.1% overall, Westminster flats are down 25.7%, and Kensington and Chelsea flats are down 15.3%. Mortgage approvals have weakened lately, financing rates have risen and leasehold running costs remain a serious drag.

But treating every London flat as a falling asset is getting lazy. Several outer boroughs are already stable or rising overall. London rents are still growing. New housing starts have collapsed. Most importantly, the price gap between flats and houses has become enormous.

As seen above, the average London flat now costs roughly £210,000 less than the average terrace, compared with a gap of only around £77,000 a decade ago. That is enough of a discount to make good flats interesting again.

We would still expect weak, expensive-to-run and easily replaceable flats to lose value first if the London market softens further. But a well-priced flat with a long lease, modest service charge, clean building history and limited competing supply has already absorbed a very large part of London's decade-long flat correction.

Our final judgment is clear: London flats are still falling as a category, but the blanket bear case is getting old. The weakest flats remain dangerous; the best ones are starting to look genuinely cheap.

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