In its 14 October feature, The Times examines the slowdown in sales of certain types of flats, exploring why some properties are proving harder to sell than others. It highlights several key factors contributing to this trend including ageing leasehold flats increasingly regarded as undesirable due to escalating service charges, properties requiring costly post-Grenfell remedial works, and waning demand from buy-to-let investors.
Bad flats: high service charges
According to research carried out by Hamptons, service charges on leasehold flats have hit an all-time high and have risen by 58% over the last 10 years. Many of these properties are considered old and tired.
Camilla Dell, Managing Partner at Black Brick, told The Times:
“Flats are having a terrible time. Particularly if you’re in one of those buildings that were built in the early Noughties, you’re in a world of pain because there’s just no demand for those, none – zero.”
Flats in areas previously popular with landlords
An increase in stamp duty, the recent abolition of ‘key tax incentives’ together with the newly passed Renters’ Rights Act, has led many landlords to sell up. Hamptons data found the number of flats bought by landlords this year is down 30% on ten years ago.
As Dell explained:
“Buy-to-let investors used to focus heavily on purchasing flats, but the appetite to put money into renting out homes is fading fast. We now see virtually no interest in the buy-to-let investment market.”
Bargains in a slow market
On the other hand, prospective flat buyers may be able to secure an attractive deal, despite the decline in demand. Buyers should still budget for future costs such as service charges and cladding repairs. Opportunities are out there and can be found across various segments of the property market.
