Nearly four in 10 London flats resold during the 12 months to August 2026, having been held for between five and ten years, changed hands for less than their previous recorded purchase price.
This is according to a new repeat-sales analysis from e.surv Chartered Surveyors.
London recorded the highest proportion of flats resold at a nominal loss in Britain.
Around one-third of flats resold after five to ten years in both the South East and East of England also changed hands for less than their previous purchase price.
The proportion was close to one in five across the Midlands and northern England, compared with just over one-quarter across Great Britain as a whole.
The longer-run e.surv House Price Index shows flats and houses beginning to pull apart around 2017, as concerns over building safety, cladding and service charges increasingly influenced the decisions of buyers, sellers and lenders in many parts of the flat market.
Meanwhile, Scotland points to a different flat market with fewer than one in 10 Scottish flats held for five-to-ten years sold below their previous recorded price.
The gap between flats and houses in Scotland is far narrower than in London, the South East or East of England.
Average house prices across Britain rose by 1.5% in the year to September, e.surv says, taking the average price to £328,900.
However, momentum has softened with average prices falling 0.2% over both the quarter and the month.
Annual growth remains positive, but the pace has slowed steadily from 2.5% in May and is now back around the levels seen at the end of last year.
Scotland leads annual growth at 3.5%, with house prices reaching an average of £234,00. London remains the only region in decline, with prices down 2.3% year-on-year in the capital.
Yorkshire and Wales are two regions closely following Scotland in annual price change, with both seeing a 3.4% rise in the past year.
Rob Owens, Head of Research at e.surv, comments: “The housing market enters the autumn moving slowly rather than decisively in either direction. Annual price growth remains positive, but shorter-term measures have softened and activity continues to face pressure from higher borrowing costs.
“Flats remain one of the clearest areas of weakness. Our repeat-sales analysis shows that this is no longer simply a gap between property-type indices: for some owners, it is being crystalised when they sell.
“It is important to understand more about the factors behind that performance, including building safety, tenure and service charges which should help buyers make better-informed decisions and give lenders a clearer view of the risks.
“Attention now turns to the Autumn Budget, where the government has already confirmed that the new Your First Home equity-loan scheme will feature, with remaining details still to be set out.”
This article is taken from Landlord Today