Price of flats falling in England

Block of flats in England with green glass balconies set against a blue sky

According to government statistics, the price of flats has fallen in England since last year. While this could be seen as an ideal opportunity for first-time buyers to get onto the property ladder, it presents a bleaker outlook for flat owners looking to sell their properties. Conversely, all other property types in England including detached, semi-detached and terraced have on average risen in price since last year.[i]

Average price by property type in England

Property typeApril 2019April 2018Difference %

Here, it’s clear to see the significant decline in the price of flats compared with other property types across England.

Average price by property type in London

Property typeApril 2019April 2018Difference %

Within London specifically however, it’s not just flats and maisonettes falling in value, semi-detached properties have also decreased in price.

Average flat prices by region

RegionApril 2019April 2018Difference %
North East£88,891£91,055-2.3
North West£118,022£117,6520.3
Yorkshire & Humber£112,231£113,519-1.1
East Midlands£112,575£113,536-0.8
West Midlands£124,796£125,6770.7
East of England£189,430£194,338-2.5
South West£161,934£164,429-1.5
South East£197,276£203,247-2.9
East of England£189,430£194,338-2.5

Examining flat prices across each region of England, shows all but the North West and the West Midlands seeing a decline in value. But even where there has been increases in flat prices, these are relatively small. The South East has seen the largest decrease in flat prices at 2.9%.

Why has the price of flats fallen in England?

The fall in flat prices across England could be attributed to several different factors. Firstly, Brexit has left the country in a great deal of economic uncertainty, which is discouraging investors from placing their money into UK property. Though, as it is only flats that have seen a fall in price where all other property type prices have risen, this doesn’t necessarily present a strong argument. 

What is convincing, is that many buy-to-let landlords are pulling out of the market and offloading 3800 properties each month, according to the Ministry of Housing. Furthermore, figures released from trade body UK Finance show that the number of buy-to-let mortgages given out in 2018 has plummeted to below 70,000. In 2007 this figure totalled around 183,000, proving a significant decline in buy-to-let property purchases.

Number of sales by property type in England

Property typeApril 2019March 2019February 2019

These figures from Land Registry highlight that where all other property type sales have fluctuated over the past three months, flats and maisonette sales have continued to decline.

It’s highly evident that the market is becoming an unattractive prospect for investors. This is very likely due to the government’s recent tax crackdown on rental income, where landlords are now taxed on their revenue rather than profit after mortgage costs. Furthermore, in 2016 the government introduced an extra 3% stamp duty charge for anyone buying a property that was not their main home. Both of which are having an enormously negative impact on Landlord’s finances.

Another case to support the fall in flat prices is that demand from first-time buyers is declining because they are opting to purchase houses rather than flats.[ii] Considering that the average age of first-time buyers now stands at 34, and according to the Office for National Statistics people are on average married by the age of 32 and have had a baby by the age of 29, it’s easy to understand why they might require the extra space and outdoor living area that a house can offer.

Final thoughts

In light of this news, flat owners looking to sell will need to be realistic about the likely price that they can achieve from the sale. As the price of flats also affects the value of the freehold in England, residential freehold landlords will also attract a lower sale price for their freehold interest.

Learn more about how residential freeholds are valued and try our online freehold calculator here.

[i] Land Registry (June 2019)  https://www.gov.uk/government/news/uk-house-price-index-for-april-2019

[ii] Richard Donnell, Insight Director, Zoopla

Adam Lowe

Adam Lowe

Adam has worked in the property sector for 20+ years. He specialises in the ground rent and freehold reversion space, providing services to clients from private landlords to corporate investors. Freehold Sale launched In 2013 where Adam enjoyed success building and managing freehold portfolios with partner companies.

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