Why are flat owners finding it tough in today’s property market?

If you're a flat owner, you may have noticed that the property market feels a bit different these days. According to data from Zoopla, house prices have risen by 24% over the last five years, while flats have only increased by 7%.

This has left many flat owners in a tricky spot, especially if you're trying to sell your property. Meanwhile, house owners are seeing their property values soar.

The growing gap between flats and houses

The price gap between houses and flats is now wider than ever. Here’s what it means for you:

• Houses: The average house now costs £319,445.
• Flats: The average flat costs £191,309, meaning houses are now worth 1.7 times more than flats.

If you’re trying to sell your flat, it might be harder than ever. Some owners have even found that their flats sold for less than what they paid for them.

What’s making it harder for flat owners?

You’re not alone in feeling stuck. Several factors are contributing to why flats are struggling in today’s market:

• High service charges: Many flat owners face expensive monthly fees, which can make it harder to sell or keep up with payments.
• Building safety and cladding issues: Ongoing safety concerns are causing unexpected costs, which puts even more pressure on flat owners.
• Leasehold confusion: If your flat is leasehold, unclear terms and high management fees can scare off potential buyers, making it harder to sell.

At the same time, demand for houses, especially larger properties, is booming. Families and investors are eager to buy, pushing house prices even higher. Flats, however, aren't getting the same level of interest.

What are your options as a flat owner?

If selling your flat is proving difficult, don’t worry—you have options:

• Check your asking price: Being more flexible on price could attract more buyers.
• Think about renting your flat out: If you have somewhere else to stay, your flat could provide steady income while you wait for the market to improve.
• Look into remortgaging: This could lower your monthly payments or free up some cash.

Should you buy a flat now or wait for a house?

If you’re a first-time buyer, you might wonder whether it’s better to buy a flat now or wait until you can afford a house. Flats can still be a great option, especially since in many parts of the UK:

• Mortgage repayments on a flat are 43% lower than renting.
• Mortgage payments for houses are 22% higher than renting.

Buying a flat could save you money on monthly payments, but make sure to check for extra costs, like service charges and leasehold terms, before you decide.

What’s the future for flat owners?

Owning a flat right now can feel tough. Without changes to leasehold laws, those with leasehold properties may continue to face challenges. But don’t lose hope. Flats are still more affordable than houses and holding on to your flat might be a wise choice in the long run.

Take some time to think about what's best for you. Whether that's changing your asking price, renting out your property, or exploring remortgaging, there are ways to make this situation work for you.