The gap between UK house prices and flat prices has widened to its biggest level on record, with the average house now costing 1.7 times as much as the average flat. New analysis points to leasehold costs, service charges and reform uncertainty as major reasons why flats are being marked down by buyers.
The latest figures show average house prices have risen 43 percent since 2016, while average flat prices are up just 10 percent over the same period. Outside London, the gap is even wider, with houses now costing 2.3 times as much as flats.
For landlords, that matters in two ways. It can create a cheaper entry point for investors looking at flats, but it also highlights why resale values, financing and tenant demand for some leasehold stock may stay under pressure until buyers have more confidence on costs and building risks.
Why flat values are lagging
Propertymark said buyers are paying much closer attention to lease length, service charges, ground rent, management arrangements and building safety issues before committing to a purchase. Its latest analysis leans on Landlord Knowledge’s recent coverage of unfinished unsafe blocks, because many landlords and owner-occupiers are still dealing with the wider cost and confidence hit from building safety problems.
According to Zoopla’s figures, the average flat now costs £193,000 against £327,000 for a house. In the West Midlands, the gap is widest, with houses valued at 2.5 times the level of flats. Scotland stands out as a contrast, with a much steadier house-flat ratio over the past decade, which Propertymark links to the absence of the same long leasehold structure used in England and Wales.
The pressure is not only about price. Buyers are also bargaining harder. Propertymark said 72 percent of responding agents believe homebuyers are more aware of leasehold issues than they were five years ago, while 67 percent said buyers are negotiating more aggressively on leasehold homes.
Costs are changing landlord calculations
Zoopla found the typical leaseholder pays around £200 a year in ground rent and £1,900 a year in service charges. While freehold owners still face repair and maintenance bills, they usually control those costs directly. Leasehold owners often do not, and that weakens confidence when major works, management delays or unclear charges come into view.
This follows Landlord Knowledge’s report on the planned ground rent cap from 2027, which showed how leasehold reform is still moving in stages rather than through one clean reset. The latest pricing gap suggests buyers and investors are still discounting flats because the system remains hard to read.
That does not make flats a write-off for landlords. In some markets they may still offer better rental yields and lower entry costs than houses. But the numbers are a warning that investors need to price in service charges, future building works, lender caution and exit risk – not just the purchase discount.
Propertymark’s latest summary of the pricing split can be viewed on its updated leasehold analysis page.
What this means for landlords
- If you’re buying flats: lower entry prices may help yields, but only if service charges and future works are fully understood.
- Watch for: further leasehold reform and any sign that lenders ease concerns around affected flat stock.
- Bottom line: cheap flats are not automatically good value if the leasehold risk is still hard to price.
Editor’s view
Flats are looking cheaper for a reason. Until leasehold costs and building risk feel more predictable, landlords should treat a discount as a question to investigate, not a bargain to assume.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 29 June 2026
Sources: Propertymark, Zoopla
Related reading: Ground rent cap set for 2027 as flat landlord pressure grows
