London flat prices slump £19,000 in a year

• Average London flat prices have fallen by £19,000 in 12 months, with experts blaming high leasehold costs and delays in implementing leasehold reform.
• Land Registry figures show the average price of a flat or maisonette in London fell from £450,000 in January 2025 to £431,000 in January 2026, a 4.2% drop.
• By comparison, semi-detached and terraced houses in London both saw a 1.2% rise in average prices, although detached houses in London saw a slight dip in average prices.

‘High leasehold costs to blame’

Property experts have blamed the dip in prices on high leasehold costs, with average flat prices in England having fallen by 2.2%.

Average service charges have soared to £2,800 a year in London, according to estate agency Hamptons’ figures reported in The Telegraph, which can make flats difficult to sell.

This issue was addressed at the Select Committee hearing on the Commonhold and Leasehold Reform Bill in March 2026. Campaign group Free Leaseholders’ Harry Scoffin warned that more than a third of flats in the UK may face significant selling difficulties due to high service charges. He said: “There is a crisis in the flats market at the moment. People cannot sell. They cannot move on.”

The warning comes as some mortgage lenders have tightened their criteria to exclude flats where service charges routinely exceed 1% of the property’s value. If you’re buying a leasehold flat, it’s a good idea to get advice from a fee-free mortgage broker.

Mortgage Finder

Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.

Find a mortgage

Also, with landlords selling up smaller properties ahead of the implementation of the Renters’ Rights Act, and continued issues around cladding and high service charges in some blocks, flats on the whole are generating less interest than houses, said Jason Tebb, of property portal Onthemarket.

Across the UK, the average property price has risen by 1.3% to £268,000. However, London house prices have fallen for the sixth consecutive month.

Leaseholders ‘hit by leasehold reform delays’

Leaseholders are also waiting to hear when leasehold reform will come fully into effect:

• The Leasehold and Freehold Reform Act is now law but many key aspects designed to benefit leaseholders, such as the abolition of marriage value, have yet to come into effect.

• The draft Leasehold and Commonhold Reform Bill was published in January 2026 with reforms including capping ground rent at £250 a year for leaseholders in England and Wales and banning new leasehold flats and making commonhold the default tenure. However, the timeline of if and when this will become law and how exactly this will work is not yet clear. 

Read more in our guide Leasehold Reform Latest News.

Expert advice to leasehold flat sellers

If you’re selling a leasehold flat, Paula Higgins, CEO of the HomeOwners Alliance, gives her expert advice on what to do now to increase the chance of your sale going smoothly. She says:

“For example, if your lease needs extending, even if you don’t want to undertake the extension yourself, you can get a quote for the estimated costs and pass this onto the buyer so they’re fully informed.”

Get free no obligation advice on your lease extension

Find a Lease Expert Solicitor

Get expert advice on extending your lease, buying your freehold or applying for the right to manage.

Get a free consultation & quote

Get the latest on leasehold reform straight to your inbox

Join our mailing list now

Related Articles

Sign up to our FREE weekly newsletter

for the latest news, advice and money saving offers

Latest News