The Flat Market’s Perfect Storm: A Recipe for Disaster

The UK’s flat market is in crisis, with thousands of would-be sellers struggling to find buyers. At its core is a perfect storm of factors that has left many wondering if the market will ever recover.

One key indicator of this problem is the number of unsold flats. According to Zoopla, across most of England, more than 80% of leasehold flats listed for sale in 2025 had not sold within six months. London was particularly hard hit, with an astonishing 87% of unsold flats.

The human cost of this crisis is evident in the stories of would-be sellers like Susan Young and Louisa. Both have been trying to sell their flats for extended periods – nine months for Young’s freehold property in Devon, two and a half years for Louisa’s leasehold flat in London. Despite these efforts, both women have faced significant challenges.

A major contributor to the problem is the mismatch between buyer demand and seller supply. In London, most first-time buyers are looking for flats, not houses – but investor-owned flats are often priced above their budget. Meanwhile, banks’ increasingly restrictive mortgage lending rules are shutting out thousands of aspiring homeowners from the market.

The government’s proposed ban on new leasehold properties in England and Wales won’t come into force until after the next election, leaving would-be sellers stuck in limbo. This perfect storm is being fueled by a toxic combination of factors: leasehold controversy, high service charges and ground rents, costly lease extensions, and difficulty buying freeholds.

Small landlords like Angie West and her wife are also caught up in this crisis. They’ve had to rent out their properties again, despite wanting to sell – and have been left with a “terrible experience” of non-payment and subletting. For ordinary homeowners, small landlords, and the broader economy, the consequences could be dire.

If flats continue to sit on the market, it will drive down prices but also reduce supply. This could lead to a cascade of effects, from reduced economic growth to increased inequality. The flat market’s woes are not just about leasehold controversy or restrictive mortgage lending rules – they’re about a deeper structural crisis that requires urgent attention from policymakers and industry leaders alike.

As the situation continues to deteriorate, it’s clear that finding a solution will be no easy task. Can policymakers and industry leaders come together to address this crisis before it’s too late? The outlook is bleak, but only time will tell if they can succeed in reviving the flat market.