Nearly four in 10 London flats resold after being held for between five and 10 years changed hands for less than their previous purchase price, according to analysis from e.surv Chartered Surveyors.

The repeat-sales data, covering the 12 months to August 2026, puts the capital at the sharp end of a prolonged divergence between the performance of flats and houses across parts of Great Britain.

Just over one-quarter of flats across Great Britain that were resold after five to 10 years fetched less than their previous recorded purchase price. The proportion rose to around one-third in both the South East and East of England, while it was close to one in five across the Midlands and northern England.

Scotland has experienced a markedly different pattern, with fewer than one in 10 flats held for five to 10 years selling below their previous recorded price. The performance gap between flats and houses is also substantially narrower in Scotland than in London, the South East and East of England.

FLATS FALL BEHIND HOUSES

e.surv’s longer-term House Price Index suggests the performance of flats and houses began to diverge around 2017. The surveyor said building safety and cladding concerns, together with service charges, have increasingly influenced buyers, sellers and mortgage lenders in parts of the flat market.

The weakness in flats comes against a wider housing market that continues to record annual price growth, although momentum has slowed.

Average prices across Great Britain increased by 1.5% in the year to September to £328,900, but fell by 0.2% on both a quarterly and monthly basis. Annual growth has declined steadily from 2.5% in May and is now around the levels recorded at the end of last year.

Scotland recorded the strongest annual growth at 3.5%, while Yorkshire and Wales were close behind, both at 3.4%. London was the only region to record an annual decline, with average prices down 2.3%.

Rob Owens, head of research at e.surv, commented: “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.”

BUDGET IN FOCUS

Owens said attention would now turn to the Autumn Budget and the government’s Your First Home equity-loan scheme, with further details of the initiative still to be announced.

He added: “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.

“The return of government-backed support for the new-build market could support both demand and housing delivery, but it arrives in a very different market from the early years of Help to Buy.”