Demand for flats is weakening at the same time as supply is rising, as landlords sell up ahead of rental reforms and buyers choose larger homes, pushing more apartments onto the market and putting downward pressure on prices, Hamptons’ data shows.

A total of 73% of first-time buyers now purchase houses rather than flats, up from 65% in 2015, while the average first-time buyer age has risen to 34.

Key drivers of that falling demand for flats include mortgage rates above 5%, the end of Help to Buy and high service charges. The average service charge has now hit £2,405 a year, up 4.6% annually and by more than 30% in five years.

Charges are being paid by a single salary.”

David Fell, Lead Analyst at Hamptons, told The Times: “Increases have been most painful for the owners of smaller flats… these are also flats which are most likely to be single-occupant, so charges are being paid by a single salary.”

At the same time, the data shows the number of flats coming to market in England and Wales rose by 12% in March compared with a year earlier, double the rate seen for houses. Only 48% of flats listed in January had found a buyer by March, compared to 60% of houses.

Landlord sell-off

A significant proportion of the supply increase is the result of a landlord sell-off ahead of the Renters’ Rights Act, which comes into force on 1st May, with separate data from Pepper Money estimating more than 65,000 homes will exit the rental sector.

The imbalance between supply and demand has led to 19.9% of flats selling at a loss in 2025, and as much as 38.1% for studios. By contrast, fewer than 5% of houses were sold below their purchase price.