Why flats are FLATLINING: Sales collapsing. Prices plummeting. And three elements killing the market stone lifeless. Experts’ untold story of what is actually happening – and the way it might destroy complete market

Competition is fierce as to which of the high-rise blocks of flats on the south side of the Thames is the ugliest. But what they all share – in a mile-and-a-half stretch from Vauxhall Cross to Battersea Power Station – is a sense of abandonment.

Hundreds of plush apartments stand empty, while others have been languishing on the market for years, with viewings few and far between.

Yet, this multi-billion pound regeneration scheme – just across the river from the stuccoed mansions of Pimlico – was hailed as ‘Dubai-on-Thames’ in 2012, when the cranes moved in and estate agents started licking their lips.

Then, the new American Embassy was built in the area at a cost of £730million, a new Tube station opened, and we were all meant to believe that Nine Elms was one of the most desirable places to live in Britain.

Today, desperation is taking hold – as it is all over the country. Because ‘frankly, no one wants to buy a flat any more’, according to one of many exasperated estate agents.

Wherever you look, it’s a similar story. Buyers are turning their backs on one and two-bedroom apartments, especially those in new, high-rise buildings, and the fallout will be far-reaching for the economy.

If the first rung of the property ladder is broken, it means stagnation throughout. Less money will be circulated for furniture, kitchen appliances and moving costs.

Indeed, prices are actually falling, particularly in London where some flat owners are reporting losses of up to 34 per cent on homes they bought six years ago.

A case in point is the purchase by a family from Saudi Arabia of a two-bedroom flat in Damac Tower, near the US Embassy, for £1.6million more than a year ago. The flat has an official purchase price of £800,000, but the agents, Foxtons, said the sellers would consider an even lower offer.

The trend is similar all over the country, especially flats in new-build blocks. Shoddy workmanship, fears about cladding, exorbitant service charges and the financial burden of stamp duty are just some of the reasons why apartments are empty or occupied by people desperate to sell – even at a loss.

‘Every day I’m being bombarded by estate agents telling me about flats that have been significantly reduced in price,’ says Charlie Parkin, who runs a buying agent specialising in central London, Hampshire, West Sussex, Dorset, Gloucestershire, Oxfordshire and Wiltshire.

Mr Parkin says a whole range of factors are putting buyers off and that ‘the general economic and unstable political climate doesn’t help’.

It means that ‘entry-level’ flats in, for example, parts of Fulham in west London, are worth less today than they were ten years ago, according to the Office for National Statistics. You could have sold a Fulham flat for £450,000 in 2016 compared with £443,600 in 2026. And whereas the price of flats nationwide grew much faster than those for houses between January 1995 and January 2017, that has not been the case since.

Quite the reverse, in fact. Flats have risen by as little as 11 per cent in the past nine years, while the price of houses during that same period has increased by nearly 40 per cent.

The outlook is particularly bleak for those who bought a flat in a new-build.

Last year, some two in every five owners of a newly built flat (bought in the last 20 years) sold at a loss, according to research by Hamptons estate agent.

In the west London borough of Hammersmith and Fulham, two thirds of all new-build flat sales made a loss in 2025.

And it’s a similar situation for those selling older properties – what’s known in the trade as a ‘second-hand’ flat, rather than a new-build.

Close to one in every five flat owners who bought an older property in the past 20 years sold at a loss, reports Hamptons.

More widely, average flat prices are down 18 per cent year on year in the City of London, and down 16 per cent in the City of Westminster, which includes Maida Vale, Soho, Paddington and St John’s Wood.

Figures from Nationwide show a similar trend, with flats falling in value by an average of 0.9 per cent over the past year.

This contrasts with prices for semi-detached houses, which have risen by an average of 2.4 per cent; detached properties are up by 2.2 per cent and terraced houses have increased in price by 1.8 per cent. No one should be surprised. The Labour government’s tax rises and the general uncertainty about where the British economy is heading have played a significant role.

But other factors are at work, too.

Service charges on new-build flats have gone up by as much as 40 per cent in the past five years. This is partly down to huge increases in energy costs caused, among other things, by the war in Ukraine and its impact on international gas and oil prices.

And whereas in the past that might not have bothered international buyers and ‘non-doms’, today many of those have left the country – to avoid punitive taxes under Labour – and invested elsewhere.

Buyers also are wary of ground rents on leasehold flats and it’s going to take some time before the Government’s new Draft Commonhold and Leasehold Reform Bill works its way through Parliament.

The bill is intended to make commonhold – in which the apartments in a single block manage their own affairs – the default for new flats, ban new leasehold flats and cap existing ground rents at £250 a year.

‘This will help but it’s not going to magically fix things overnight,’ says Neal Hudson, housing market analyst at BuiltPlace.

He adds: ‘People have begun to realise that many of these new blocks of flats are not built to last and so you’re being asked to buy a depreciating asset.’

And that applies to the top end of the market, too.

Residents of One Hyde Park in London, regarded as the most expensive tower block in the country, recently won a £35 million court case against the contractor that built their homes. The

High Court ordered the construction company, Laing O’Rourke, to fix defective pipework that was discovered in 2014, only three years after the luxury development was completed.

Then, there’s the ongoing cladding issue, which began with the horrific Grenfell Tower fire in 2017, when 72 people lost their lives. Trust in high-rise apartment buildings was destroyed overnight. The wrangling over cladding has continued ever since.

‘We’re also still seeing the fall-out from the pandemic when a lot of flat owners wanted more space and moved to the countryside,’ explains Mr Parkin. ‘Flats lost some of their appeal during that time.’

The increase in interest rates – and the cost of mortgages – is another factor.

From a historic low of 0.1 per cent in March 2020, rates rose to a peak of 5.25 per cent in 2023. The current interest rate has gone down to 3.75 per cent, but the cost of living has increased massively over the past five years.

‘It’s not just investors who have noticed the high costs associated with flat ownership,’ says Mr Hudson. ‘Even if your ground rent is tolerable, there’s the additional cost of service charges, buildings insurance and sinking funds for repair and maintenance.

‘Government reforms should help make these costs more transparent and fairer, but they are still going to exist whether your flat is leasehold or commonhold.’

It could also be the case that some first-time buyers are turning their backs on flats and, instead, are saving up to try reaching the second rung of the ladder, thereby avoiding two separate stamp duty payments.

But with rents at record levels, it’s hard to imagine that young couples are able to save enough money on a monthly or yearly basis to cover the deposit on a house rather than a flat.

For first-time buyers, the widespread reductions in the price of flats does, of course, represent an opportunity. There are deals to be done.

But if moving on in a few years time starts to look precarious, with a flat worth less than it was when you bought it, then potential buyers will be scared to take the plunge.

The property ladder has been buffeted in the past but there’s a real danger it will soon be broken. And fixing it will take decades.

For years, developers have been allowed to build sub-standard blocks of flats, cashing in on the need for more housing – and laughing all the way to the bank.

But if the game is up for the cowboy builders, there’s no sign of a sheriff riding to the rescue of flat owners who are now prisoners in their own homes.

Giant discounts available now…

Reduced by £275,000: Malden Road, Kentish Town, London NW5, 2 bed maisonette for sale, £525,000

With wooden floors, a courtyard and two bedrooms spread over two floors, this maisonette in Kentish Town was listed in March 2025 for £800,000, reduced four times it is now on offer for £525,000 (foxtons.co.uk)

Reduced by £499,950: Park Street, Fulham SW6, 2 bed flat for sale, £775,000

Looking over the canal in Chelsea Creek this modern build in Fulham has two beds, two baths and fancy trappings such as a 24-hour concierge, underground parking and a gym. It was sold in March 2016 for £1,274,950 and went on the market again last year and is currently on sale for £775,000 (dexters.co.uk)

Reduced by £440,000: Saffron Central Square, Croydon CR0, 2 bed flat for sale, £360,000

A penthouse flat in Croydon with two terraces, two bedrooms, two bathrooms and two reception rooms. It went on the market in March 2025 for £800,000 and has been reduced to £360,000 (foxtons.co.uk).

Reduced by £69,000: Branston Street, Birmingham B18, 2 bed flat for sale, £180,000

With exposed metal and brickwork, and right in the middle of Birmingham’s Jewellery Quarter, this flat has two beds, two baths and two parking spaces. In 2016, it sold for £295,000 and then went on the market this month for £249,000 and already has been reduced to £180,000 (maguirejackson.com)

Reduced by £75,000: William Jessop Way, Liverpool L3, 2 bed flat for sale, £275,000

With river views, two beds and two baths, parking and concierge this 17th-floor flat in Liverpool was listed in July 2025 for £350,000 and has been reduced five times, now at £275,000 (xorealty.co.uk) Realty, 01512 219064

Reduced by £30,000: Waterloo Road, Liverpool L3, 2 bed flat for sale, £200,000

Set in a Grade II listed warehouse, with barrelled brick ceilings, two beds and two baths, this went on the market in October for £230,000, now £200,000 (entwistlegreen.co.uk)