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The gap between the prices of houses and flats in the UK has widened to a 30-year high, according to data from Zoopla, as concerns about cladding and rising service charges weigh on demand for apartments.
At £319,500, the average price for a house in January 2025 was 1.7 times higher than the average cost of a flat, the largest gap since at least 1995, according to research by the property portal.
House prices have grown by 2.2 per cent in the past year, the data shows, while the average price of a flat grew by 0.5 per cent to £191,300.
“There has always been a gap between house and flat values but this widened over the pandemic when buyers prioritised a search for space at a time when flats were hit by concerns over running costs and building safety,” said Richard Donnell, Zoopla’s executive director.
“Buyers are still prioritising houses over flats,” he added, “but there are opportunities for canny buyers prepared to do their homework and weigh up the purchase of a flat.”
The average price of a house rose beyond 1.5 times the price of a flat for the first time in 2021, in the wake of the UK’s cladding crisis, and following the pandemic-era “race for space”, when work-from-home mandates further decreased the appeal of cramped apartments.
The Grenfell Tower fire in 2017, which killed 72 people, led to the reassessment of fire safety regulations relating to blocks of flats. In the years that followed, millions of leaseholders have faced lengthy and expensive remediation works to remove unsafe cladding and fix building defects.
“The complexity and higher costs associated with owning a leasehold” have suppressed prices for flats, said Aneisha Beveridge, head of research at estate agent Hamptons. The average service charge rose by 11 per cent in 2024 to £2,300 per year, according to analysis by Hamptons, released this month.
While demand for flats remains muted, the number of apartments for sale has increased, according to Zoopla. In the first six weeks of 2025, listings of flats rose by 14 per cent year-on-year, as demand rose by 1 per cent. The stock of houses increased by 5 per cent over the same period, while buyer demand rose by 16 per cent.
Flats now account for one in four homes for sale, according to Zoopla. Tom Bill, head of UK residential research at estate agent Knight Frank, said owners of flats were rushing to sell their homes ahead of stamp duty increases in April, which “will have a greater impact on lower-value markets”.
Overall, Zoopla found that annual property price growth slowed to 1.9 per cent last month — down from 2 per cent in December.
“While market activity is on the rise, we expect house price growth to be kept in check over 2025,” said Donnell. “There has been a sizeable increase in homes for sale in the early weeks of the year which is giving buyers greater choice and stronger negotiating power.”