Almost half of one-bedroom and studio flats in London are selling at a loss, new analysis of Land Registry data suggests.

Experts have been warning that concerns about leasehold and escalating service charges have triggered a crisis in the flats market with many owners struggling to sell.

Losses are not limited to owners who bought their flats in the recent market peak as some sellers who bought 10-20 years ago have also had to sell below their original price, research by Bricks&Logic found.

Larger apartments are also under pressure, according to the findings reported by This is Money.

So far this year, more than a third of two- and three-bedroom flats sold in London have changed hands for below their original purchase price.

Separate research recently suggested that up to 37% of flats in England and Wales could be unmortgageable, because their service charges are above 1% of the property value, a figure many lenders will not accept.

Hamptons’ figures show that leaseholders of flats in England and Wales paid an average service charge of £2,405 per year in 2025, up by 4.6% from 2024.

Its analysis reveals that average service charges have risen by 56% over the past decade outstripping consumer prices index (CPI) inflation of 40% over the same period.