STOP Don’t Buy that Flat in London 2025

Here's why it may be a bad idea to invest in a flat in London in 2025. The scales have tipped in favor of buying a house with a huge discrepancy in values between flats and houses in the past 10 years.

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Why buying a London flat is no longer a solid investment

- Values not keeping pace
- Ownership costs skyrocketing
- Harder to sell
- Negative equity potential

1. Depreciating Values
The avg price of a flat hasn’t gone up since 2016 and actually has fallen against high inflation
(houses on the other hand have seen a 25% increase)

2. Ownership Costs Have Gone Through the Roof
Explain leasehold vs freehold
- avg service charges have risen from 1700 in 2016 to 2600 in 2024
- buildings with cladding flat owners on the hook for remediation costs+ high insurance rates
- almost a million leases have escalating ground rents that trap them
- (after 2022 reform only nominal rate allowed)

3. Obstacles to Selling a Flats
- same reasons as ownership costs
- leaseholds with rising service charges are impossible to sell -leasehold reform has yet to pass
- cladding issues not sellable - small % have been remediated
- mortgage companies won’t touch

4. Monthly Mortgage Payments Jump
- since 2023 you're paying down interest instead of than equity
- a mortgage of 300K with £1770 monthly payments is 1275 in interest - in 2 years you’ll pay £30,000 in interest and only gain £11,880 in equity
- potential for negative equity if you have to sell quickly

Similar mortgage costs when a buying a home vs flat, but the major difference is leasehold, ground rent and cladding issues affecting future saleability of a flat and chance of not gaining enough equity to walk away from a home sale without losing money.

DOWNSIDES to owning and selling a flat in London in 2025
- potential negative equity
- being trapped due to rising service charges, grnd rent
- poor investment -
Could you sell for as much as you paid?

WHERE TO BUY INSTEAD - northern cities like Manchester and Edinburgh (Americans buyers are flocking there)

If you’re going to buy in London, buy a house with freehold. You’ll avoid the worst of the current problems facing sellers/buyer of flats

If you have to buy a flat - do so for the kind of security you get with home ownership (stability, raising kids) but not as an investment unless it’s a lesser risk with lower future costs.

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ABOUT:
Hi there, I'm Tessa, British born but a UK/US dual citizen. Grew up in the US and Canada but back in England and discovering what life is like for an “American” living in the UK!

I started HIPOVERFIFTY.COM to share my travels, thoughts and ideas about being over 50 and this channel is my big leap into going live! Thank you for watching and hope you're inspired to follow your heart too.

#howtomovetoengland #overfifty #movingtoengland #movetotheuk #over50life #traveltoeurope

YOUR GUIDE TO LIVING IN THE UK FOR 6 MONTHS or more
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