Outside London, the disparity is starker still. Houses cost 2.3 times the price of flats, compared with 1.8 times in 2016. The West Midlands records the highest regional ratio at 2.5 times, where houses remain affordable enough that many first-time buyers bypass flats altogether. Zoopla’s data indicates that more than half of first-time buyers outside London are seeking a three-bedroom house.
London presents a different picture. There, the ratio stands at 1.9 times, constrained by significantly higher house prices that leave flats as the primary route to ownership for most buyers. Seven in 10 London first-time buyers are actively searching for a flat, sustaining demand and limiting the price divergence.
“The gap between house and flat prices has never been wider, and for buyers who are prepared to do their homework, that presents an opportunity,” said Richard Donnell (pictured right), executive director at Zoopla. “For many, flats remain the main route into home ownership, particularly in London and the South East where the cost of buying a house is higher.”
Leasehold costs and buyer hesitation
Four in five flats listed for sale in England are leasehold. Zoopla’s analysis of leasehold listings shows the typical leaseholder pays £200 a year in ground rent and £1,900 a year in service charges — a combined £2,100 annually. The analysis notes that freehold owners similarly incur insurance and repair costs but manage them independently, without ground rent obligations or lease term concerns.
Running costs range from 0.7% to 1.3% of property value per year. Lenders tend to scrutinise properties where costs exceed 1% of value, with additional attention given to lower-value markets in northern regions or where ground rent and service charges are elevated.