London Flats: A Decade of Stagnation and What Comes Next

 

Buying a flat in London used to be a no-brainer. For decades, you couldn’t lose — prices only went one way. But since 2016, that story has changed.

Here’s what I see every day on valuations: 9 out of 10 flats I appraise today are worth the same, or even less, than they were 10 years ago. Houses, meanwhile, have kept climbing.

Why? One word: leasehold.

Service charges and ground rents have spiralled. I’ve seen it first-hand. A £400,000 flat I valued had a £4,000 annual service charge (heating and hot water included). The next year it jumped to £6,000. The year after? £8,000. That’s 2% of the flat’s entire value every year — gone.

Now the flat is almost unsellable. Lenders won’t touch it. Buyers walk away. The owner? Trapped.

And this isn’t a one-off. Across London, freeholders are hiking service charges — often in anticipation of reforms that will strip away their “marriage value.” Add inflation, and it’s a perfect storm for leaseholders.

For first-time buyers, the question is obvious: is this really a smart move?
For homeowners, another tough truth: if you’ve outgrown your flat and want to move up the ladder, you may find you can’t sell at a profit — or at all. Renting it out often doesn’t cover the costs either. Many of my clients conclude they’d have been financially better off renting.

Of course, it’s not all doom and gloom. Investors focused purely on yield may still find opportunities, but service charge inflation must be part of the maths. And for buyers, long-term ownership still brings stability that renting can’t.

The government’s Leasehold Reform Act is a cautious reason for optimism. Scrapping marriage value, ending new leasehold houses, streamlining extensions — all good steps. But let’s be realistic: reform won’t fix the flats already on the market, and it won’t erase a decade of stagnation overnight.

So, the bigger questions are:

• Will reform really change the game, or just paper over the cracks?

• How sustainable are today’s service charges?

• If freeholders are already pushing costs higher, what happens next?

• Are leasehold flats quietly becoming London’s negative-equity trap?

• Would you actually be better off renting until the dust settles?

If you’re weighing up your options — whether that’s selling, buying, or just figuring out your next move — let’s talk.

#LondonProperty #Leasehold #FirstTimeBuyer #SouthLondonProperty