As flat prices shrink, why have home buyers fallen out of love with single-storey living?

A growing number of flat owners are being forced to sell their homes for less than they paid for them, as appetite for single-storey homes appears to wane.

New figures from estate agent Hamptons shared exclusively with This is Money show that in 2025 to date, 22 per cent of flat sellers have sold for less than they bought for - more than double the rate seen across the wider market.

Separate figures from Property Data suggest 24 per cent of flat sales in London since October 2024 and June 2025 were sold for less than they were bought for.

There are more than six million flats and maisonettes across England and Wales, according to government figures.

They were once regarded as a stepping stone onto the property ladder for young people in more expensive areas, or as a way to downsize in retirement and be closer to friends and family.

Many landlords also favoured flats for their buy-to-let investments.

However, some of those who have bought over the past decade may now be regretting their decision.

Flats were always cheaper than houses, but the price gap has widened over the past decade.

In June 2015, the average price of a flat was £161,000, according to Zoopla compared to roughly £218,000 for a house - a gap of £57,000 on average.

A decade later, and the average price of a flat is £191,000 compared to £321,000 for the average house. The gap has increased to £130,000.

This means that the difference between the typical house and flat has gone from 30 per cent in 2015 to 51 per cent in 2025.

Zoopla says the typical flat to house price ratio has increased from 1.35 to almost 1.7 in just 10 years.

And houses may be pulling even further ahead, according to the latest figures from the Office for National Statistics.

They show price of the average flat or maisonette in Britain has only increased by 0.3 per cent in the past 12 months.

Meanwhile, terraced houses are up 4.1 per cent, semi-detached homes are up 5 per cent and detached homes are up 4.4 per cent.

'Flats have had a tough run in recent years, shaped by a mix of structural challenges and shifting buyer sentiment,' says Aneisha Beveridge, head of research at Hamptons.

Recent data released by Nationwide Building Society suggests that homeowners strongly prefer houses over flats.

While flats now account for a higher proportion of social housing and privately rented homes. The proportion of flats used for private rentals is now 42 per cent of the total stock – up from 38 per cent in 2013.

The picture is very different for owner occupiers, where flats represent just 10 per cent of owner occupied homes, with semi-detached houses most prevalent at 29 per cent.

Flats often come with some off putting factors. For a start, many come with high service charges and ground rents.

While ground rents have now been outlawed for all new leaseholds, many still endure these costs.

Service charges are also reaching terrifying levels in some apartment blocks across major cities. This may put off buyers who are reluctant to commit to costs they have little or no control over.

'Buyers are very wary of service charges which can be extortionate, usually rising year after year,' says Jo Eccles, founder and managing director of prime central London buying agency, Eccord.

The average annual service charge bill for a flat in England and Wales hit £2,300 in 2024, an 11 per cent increase on the previous year, according to the estate agent Hamptons.

One listing on Rightmove shows a 2,486 square foot duplex apartment currently on the market in Canary Wharf in London, which is asking for 'offers over £1million.'

The apartment, which previously sold for £1.588 million in 2005 comes with a whopping service charge of £29,760 per year, alongside a £700 ground rent.

On top of that, the sector has been hit by the cladding scandal, and reforms to the leasehold system, some of which only apply to new leases, have highlighted its flaws.

Buying agent Jonathan Hopper says flats have suffered as a result. 'Flats have become a bit of a victim area of the market,' he says.

'While all flats are not made equal, anything forming a leasehold property has picked up stigma in recent years.

'This is particularly the case due to cladding issues and the leasehold reform act and the uncertainty caused.'

The legacy of the pandemic 'race for space,' where lockdown-wary buyers prioritised larger homes with nice gardens, has also contributed.

Richard Donnell of Zoopla says: 'The value of flats has under-performed the market for houses as buyer preferences have changed, with greater prioritisation of space and more awareness of running costs.

Affrdability struggles and the high cost of moving are also leading some buyers to save up for longer, and buy a house instead of a flat as their first home.

Many plan to stay in their home for longer and save on costs such as stamp duty.

'Affordability pressures mean buyers are planning to stay in homes longer than in the past when flats were more of a stepping stone to a house and people would buy for a few years before trading up,' says Zoopla's Donnell.

Eccles also thinks buyers are now much less willing to consider flats as a first home.

'Fifteen years ago people would come to us buying for the here and now, and then return a few years later to move up the next step of the ladder,' says Eccles.

'But now, stamp duty is so prohibitive - especially in London - that we're seeing people jump the flat stage if they can and go straight to the family house.

'As a result, demand for flats has softened at the same time as supply is increasing.'

Personal reasons come into it, too. With first-time buyers getting on the ladder later in life, some need a home that can accommodate a family straight away.

'First-time buyers are now typically purchasing later in life and want homes they can grow into, not out of,' says Beveridge.

'That desire to "future proof" - and avoid the cost and hassle of moving again soon -means flats are no longer the default first step onto the ladder.

Not helping to improve flats' appeal is the fact that new-build apartments appear to be getting smaller, while houses are getting bigger.

Average property sizes have increased slightly, according to a recent report by Nationwide Building Society. Between 2013 and 2023, the average floor area of a home has increased from 95.3 sq m to 96.2 sq m.

The largest increase has been in terraced houses, where the average floor area is 3.6 per cent bigger than in 2013.

However, the average size of a flat is now 1.7 per cent smaller than 10 years ago at 60.3 sq m.

Buy-to-let investor demand for flats has also fallen sharply when it comes to flats.

In 2015, landlords bought a quarter of all flats sold, according to analysis by Hamptons, but so far this year, that figure has dropped to just 14 per cent - a steeper decline than seen across the wider market.

'Investor demand has also dropped off sharply, further softening demand,' says Beveridge.

While many flat owners will likely be disappointed by the fact their homes are failing to rise in value, they may also find it takes longer to sell in the current market.

The average flat takes 20 days longer to sell than the average house, according to Hamptons.

Flat sellers may also have to discount their properties more deeply in order to get a sale over the tine.

In July, the average flat sold in England and Wales achieved 93.9 per cent of its initial asking price, compared to 95.7 per cent for the typical house.

Flats have consistently sold at greater discounts than houses since 2017, according to Hamptons, and this gap has persisted in the current market.

The price gap between flats and the wider market tends to be narrower in city centres, especially in London, where flats dominate the housing stock.

In city centres, large, lateral apartments or penthouses can sometimes command higher prices than houses, thanks to their size and panoramic views.

This is why the average price of flats in Tower Hamlets is only 3 per cent below the wider market, while in the City of Westminster, flats are only 11 per cent lower.

Even so, that's not to say that many parts of the capital are not immune from this loss of appetite in flats.

Across London, the average price of a flat or maisonette is now £443,000. That's barely any different from what it was at the start of 2017 - a mere 1 per cent increase.

That compares to terraced houses in London, which have risen on average by almost 20 per cent from £533,000 to £638,000 during that time.

Rightmove listings in the capital are awash with flats selling for less than they previously sold for.

One two-bedroom flat in Brentford equipped with river views, a roof terrace, concierge swimming pool and gym previously sold for £822,000 in October 2023 - but is currently under offer with a listed price of £700,000.

Another example, a three bedroom flat in Fulham in West London with two balconies and river views is currently listed for £1m having previously sold for £1.56m in August 2014.

The estate agent has left a note in the description that an offer has been made for the property in the sum of £895,000.

In contrast, flats in rural areas are less common and often take the form of house conversions, which helps explain why they tend to be valued lower relative to the local average, which more closely mirrors a house.

For example, in the local authority of Breckland in Norfolk the average flat sells for £115,200 compared to the average property price of £277,560, representing a 58 per cent gap.

Similar price gaps can be found in Fenland (Cambridgeshire), in Melton (Leicestershire), and in Powys (Wales) and Boston (Lincolnshire).

Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.

Buy-to-let landlords should also act as soon as they can.

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What if I need to remortgage?

Borrowers should compare rates, speak to a mortgage broker and be prepared to act.

Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.

Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.

Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.

What if I am buying a home?

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.

Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.

What about buy-to-let landlords?

Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.

This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too.

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