The new-build houses which have HALVED in worth: The hidden flaws, cash pits and loopholes that make your property unsellable

When Richard bought his London flat in 2015 for £1.2million, he thought he was making a good financial decision.

After downsizing and selling his previous house for £1.9million, the 70-year-old had reduced his mortgage significantly. The only downside was the £8,000-a-year service charge he would have to pay.

But after these charges increased steadily to almost £20,000 a year, he says he feels ‘trapped’ in the flat after retiring.

His neighbours, who have tried to flee the extortionate service charges, have sold up for a little under half of what they paid for their flats and Richard now worries he will only get around £600,000 for it, if it ever sells.

New-build flats on their first resale are currently almost twice as likely to be sold at a loss, new research from Property Data reveals.

In the past two years, 36 per cent of new-build flats that were re-sold, were sold at a loss. Only 19 per cent of old stock was sold at a loss over the same period.

‘We’ve got this £1.2million asset which just feels valueless. Now that I’m retired it would be great to maybe move to the countryside but we just can’t do that because we can’t sell the flat,’ Richard says.

‘The service charge has increased by around 140 per cent and it is now prohibitively expensive – it really deters anyone from wanting to buy in the complex.

‘And we don’t get anything for that money. No gym, no pool and in fact the building looks terrible, making it even harder to sell.’

Richards says he even considered letting the bank repossess the property by not making his mortgage payments to avoid the service charges.

Across the UK, scores of new-build high-rises punctuate the skyline – but buyers are now losing hundreds of thousands of pounds when they decide to sell.

Built to rival the City and to recreate the feel of Manhattan in the UK, Canary Wharf has always been known for its shiny high-rises and office blocks.

One of Canary Wharf’s newest developments, known as The Wardian, was completed in 2020 and consists of two skyscrapers. They are among the tallest residential developments in Britain.

While the building boasts a 24-hour concierge, a 25-metre heated swimming pool and a spa, as well as 100 species of exotic plants, its residents are selling their flats for extraordinary losses. Service charges can cost more than £11,000 a year for a two-bed flat.

One 1,018 sq ft two-bedroom flat in the building was bought new for nearly £1.35million in December 2020, the equivalent of £1.72million when adjusted for inflation.

It was sold for just £975,000 in January this year. That represents a 44 per cent loss in real terms or, £753,000.

A studio flat in the same building was bought for £478,500 in March 2021. It was sold for £400,000 in March last year, a 16 per cent nominal loss.

When adjusted for inflation, the studio flat made a 46 per cent loss.

Another one-bedroom flat in the same building was sold at a nominal loss of £101,000 after it was bought in February 2021 for £790,000 and sold for £689,000 in August 2025.

The 2012 London Olympics saw the regeneration of the areas around Stratford and with transport links to the City and Canary Wharf you may have been forgiven for thinking buying one of the high-rise flats or new-build apartments would be a prudent investment.

But prices have tumbled here too. A flat in Langham House was sold in February this year for £395,000 after it was bought for £423,175 in 2019 – a 39 per cent real-terms loss.

Another new-build flat in Stratford was sold for a £250 profit when it was sold in 2025 for £300,000. When factoring in inflation the owner, who bought it for £295,850 in 2017, made a 34 per cent loss.

And the issue is not just contained to London. A new-build flat in Manchester, near Deansgate station was sold for £40,000 less than what the owner bought it for in September 2020.

One reason these flats are making a loss is because of the high service charges you might pay in one. Service charges are set by the administrator or the freeholder of the building and go towards cleaning costs, repair work and other amenities such as concierges and gyms.

But the owners of the flats, the leaseholders, have little to no influence in determining how much these service charges are – and prices can rise dramatically over time with no consultation.

Lily King, 28, bought her new-build flat in Rochester, Kent, for £310,000 in 2024. And while she loves the flat, she says she is worried that the service charge will make it difficult to sell the flat in the future.

The charge has doubled in the past two years from £1,200 to £2,400 annually.

‘We asked the management company to break the costs down and some of the prices are ridiculous. We’re all paying thousands for cleaning which is just someone who hoovers the hallway,’ Lily says.

‘I’m definitely worried about the charges. When it comes to selling, why would you buy a flat with high service charges over one that doesn’t have them?’

Amelia, who wants to remain anonymous, has been trying to sell her two-bed flat in Brentwood, Essex, for nearly a month but has not had a single interested buyer come forward.

Her service charge has also gone up by £800 in a few years and she is now worried that when her fixed mortgage ends next year, she will be hit by a double whammy of costs from higher service charges and a higher mortgage.

‘It’s frustrating because if those service charges go up, you just have to pay it. We put money away every month to make sure that we’ve got enough to pay for it. But then if they tell you that it’s actually going to be a few hundred pounds more than you’re expecting it’s really tough,’ Amelia says.

‘When we first moved in, we were like, oh, that service charge is fine. But I think there wasn’t enough knowledge, for me anyway, around how little control you have over the service charges and if they go up or not.’

She bought the flat four years ago for £385,000 but she is now selling the flat for £375,000.

Amelia is particularly worried because her neighbours, who put their flat on the market in January, are also struggling to sell.

She says her neighbour’s flat is a bigger plot and that they have already reduced the asking price to £350,000 after receiving little interest in the flat.

Amelia used the Help to Buy scheme and it seems likely she will be in negative equity if she sells for any lower than £375,000. To close the mortgage and repay the help to buy, she may have to pay back tens of thousands of pounds.

Help to Buy was a government scheme to essentially provide a deposit on a new-build home in the hopes that the value of the property would go up.

And while the government loan will fall if the property price does, Help to Buy made it more likely a property was bought at a higher price – meaning the mortgage would be higher. This leaves the buyer at a greater risk of negative equity if they sell at a loss.

Ameila adds: ‘I feel like it’s a bit of a race against time to get the flat sold before the mortgage goes up next February. The service charge will go up again at some point and everything’s going up in price so it is a bit of a worry.’

The common theme with all three of these new-build flats is that they are leasehold. The fact that flat owners do not own the freehold could be the reason these prices are plummeting.

Leasehold flats are losing value disproportionately compared with freehold houses, recent analysis by Hamptons found. Last year in London, 60 per cent of property sales were flats. But these flats represented 90 per cent of homes sold at a loss. The vast majority of flats in Britain are leasehold.

Harry Scoffin, founder of campaign group Free Leaseholders, says: ‘New-build flats are now having to be given away as buyers finally wake up to the racket of leasehold, where absentee freeholders have the whip hand over people’s homes with soaring service charges making the biggest purchase of a lifetime unmortgageable and unsellable. Service charges are becoming a second or third mortgage, often imposed and increased arbitrarily at rates far above inflation.

‘We have the biggest price gap between house and flats in 30 years, according to Zoopla, as buyers shun leaseholds.’

But Marc von Grundherr, director of estate agency Benham & Reeves, argues that people are ‘trying to talk the market down’.

He says: ‘Service charges are a massive issue. But new-builds are definitely still attractive. They have no maintenance costs, whereas older buildings can have significant maintenance costs.

‘My overseas clients want new because the process is easier than buying off someone and because they can buy off-plan.

‘They are still a good asset. The rent will cover the mortgage so I don’t know why someone would sell if it is going to be at a loss.

‘The reality is, our business is managing just under 4.000 homes in London and last year, we saw less than 1 per cent sell up, and they are not selling up just because they’re running for the hills. We just haven’t seen a mass exodus in the market at all.’

* Richard‘s name has been changed