Flat Prices Are CRASHING — London Hit Hardest

Added: 2026-05-22

[00:00:00]Hey, my name is Jake Nicholson. Welcome to my YouTube channel. There's a real problem with flats in the UK and particularly in London. Flat prices in London are down significantly, double digits now. And in this video, I'm going to talk to you about where in London flats are down. Some places they are, some places they're not. And also, what's causing this massive decline in the price of flats in the UK and in London in particular. Now, before we do jump into this, if you are new around here and you haven't done already, please do subscribe to my channel over there and hit that bell notification.

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[00:01:00]So, flats, they're not doing great recently and particularly in London.

[00:01:06]Now, after the pandemic or during the pandemic, there was uh more people that wanted to live in houses because obviously there was the fear that we might go into lockdowns again and people just wanted more space.

[00:01:23]Also, people have been working from home a lot more in that period of time as well. Now, some people are going back to the office now, but still, a huge chunk of my mates work at home uh and they've got jobs that would have never allowed that prior to 2020.

[00:01:39]So, what's going on with uh flats? Uh where are they at at the moment? Um well, London flats are not doing great.

[00:01:51]So, in outer London flats are down this year 2.6% which is not insignificant, is it?

[00:02:08]That's quite bad.

[00:02:10]Um but it gets worse. In central London it's much, much worse than this.

[00:02:17]So, in central London flats are down 8.7% in a year.

[00:02:26]8.7% in just 1 year. It's not great if people bought during that time, obviously. A huge amount wiped off. Now, since 2020 these are the figures uh for that. So, outer London flats since 2020 are up 4.1%.

[00:02:47]Uh so, a little bit of increase there, but in real terms if you take into account for inflation down quite a lot.

[00:02:54]Now, in inner London since 2020 flats are down 11.2% which is crazy. So, let's have a look at some of the reasons uh why this is happening.

[00:03:07]First is service charges.

[00:03:11]They have been going through the roof. And you've got the leasehold and common hold act that's being worked on at the moment and the goal of that is to give leaseholders more power over controlling the service charge, but costs have gone up. Energy costs have gone up. Uh companies are putting their prices up on everything and that's put service charges up which puts off a lot of people. There's a property in Hastings. You can find it on Rightmove.

[00:03:41]You can tell me the right figures here.

[00:03:42]I'm just going to give it a guess. I haven't looked at it for a while, but it's been on sale, I think, 20 years now. Uh it's a flat. It's very cheap.

[00:03:50]It's on the Hastings seafront. It's something like 20, 40 grand. Um the problem they've got is the service charge is like 7 or 800 pounds a month because there's major problems with the building. It's a huge building on Hastings seafront. And there are other ones in London like that. And service charges are putting people off. Um next is just like what's going on with leasehold.

[00:04:19]The leasehold uncertainty at the moment. That puts people off.

[00:04:24]They want to know, are we going to get the Leasehold and Commonhold Act through? Because we had a bill passed called the Leasehold Reform Act. That passed. That said that you could extend your lease much cheaper. It said that they would get rid of marriage value.

[00:04:39]But none of it became active law. So Labour's making their own bill called the Leasehold and Commonhold Act.

[00:04:46]But they already said when they got to power, they would abolish leasehold in the first 100 days. That was never going to happen. And so people have seen promises, promises from Conservatives, promises from Labour, and none of them have been kept. And now the Leasehold and Commonhold Act, they're saying it's going to be something that they'll pass by 2029.

[00:05:06]Coincidentally in line with the general election. So we'll see. But that stuff means people wait. They wait and see.

[00:05:14]They want to know and get a bit more certainty. So that isn't good for the market as well.

[00:05:20]Next you've got the cladding issue.

[00:05:22]Obviously the horrendous stuff that happened at Grenfell.

[00:05:28]Um and that has been a problem. That cladding is on lots of buildings all over London and across the UK. And the government said in the King's Speech a few weeks ago that now they're going to get this done. They're going to get this done.

[00:05:44]The The on that again is 2029, Uh but it gives people an end date.

[00:05:50]There's going to be big fines. They're going to go after developers.

[00:05:53]Hopefully, they get this stuff resolved, and that cladding issue means that some property just aren't sellable.

[00:06:00]And maybe people reduce the price really low in order to get a sale. So, cladding is a big problem.

[00:06:10]Houses are just more desirable. Now, there's not loads of houses in London, but people are moving out to the home counties. They can work from home now, and they don't have to commute every single day.

[00:06:23]I'm in Dorking. Dorking's benefited from people moving out from London. They commute maybe one or twice a week rather than five times a week now. So, they want to live in those bigger areas with houses. Mortgages.

[00:06:40]Now, this is a problem at the moment.

[00:06:43]You see, mortgages were going down.

[00:06:45]They were expected to really drop in 2026. We're expecting inflation to drop to below 2% by now. Unfortunately, we had a war that was started in Iran. That shot all the energy costs up. That shot mortgage rates up by 1% in about a month. That's putting people off. It means affordability is not so great. And these things will hit the London market as well as other places as well, but London people stretch themselves a lot more to to get stuff done.

[00:07:16]Next is investors backing away.

[00:07:21]So, the Renters Rights Act went through a few weeks ago. And that means that landlords are quitting. Landlords would commonly be people that would buy flats because flats are easy to rent. People want that stuff at that end of the market. And so, yeah, investors are leaving the market more than are coming into the market. We had a decline of 200,000 investors in 2025. We're going to see a similar number this year.

[00:07:48]You're also losing foreign investors at the moment with all the global uncertainty. People don't want to take risks at the moment, and that's causing problems, especially for London market, which would have had a lot of foreign investors. Um and the next thing is new builds. People just aren't building new builds at the moment. And when they are built and sold, they're higher priced.

[00:08:13]Uh and that brings up the average price in a market. Um but yeah, people aren't building. In fact, last year, in May, I believe it was, and June, it was like 15 properties, new build properties sold in London, which is crazy if you think about it. Just 15 properties. So, London is getting hit hard, 11% down since 2020.

[00:08:38]That's pretty much a crash in my eyes.

[00:08:40]Let me know what you think about that.

[00:08:41]Do you think it's going to carry on going down, or do you think it'll get to a point now where people are looking at it and saying, "Hm, they're actually bargains now."

[00:08:49]Uh do let me let me know in the comments. Do like the video, as always, and always subscribe to the channel.

[00:08:54]Let's get to 56,000 subscribers. And check out all the other content as well on the channel now, including this video right here.