Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Flat Demand Holds Steady as Buyers Scrutinise Leaseholds and Safety

Most flats in the UK are remaining unsold after six months on the market, but advisers report that demand for flats is not falling. Instead, buyers are becoming more selective, with increased attention to building safety, leasehold terms, and affordability.

Data from Zoopla showed that 80.5% of flats in the UK were unsold within six months in 2025. In London, this figure rose to 86.9%, with the South East at 84.9% and the East of England at 84%. According to the Office for National Statistics (ONS), average property values rose by 2% annually in June, but flats were the only property type to see a decline, falling by 1.6%.

Aisha Clarke, mortgage and protection adviser at Mantra Mortgages, part of BTG, stated that flats remain an important route onto the property ladder, especially for first-time buyers in London. Clarke noted that buyers are now scrutinising all aspects of flat ownership, including service charges, ground rent, planned major works, and building safety documentation.

Building Safety and Cladding Remain Key Issues

Building safety continues to be a significant concern for flat buyers. Cladding risks are still a topic of discussion, with reference made to residents of the Spectrum Building in Dagenham, who are reportedly still paying mortgages on homes destroyed by fire two years ago. The building’s flammable cladding was being replaced, but the cause of the fire has not been determined. Government reforms have shifted cladding remediation assessments to a risk-based approach rather than one based solely on building height.

Matthew Hattersley, regional director in asset advisory, restructuring and recovery at BTG Eddisons, part of BTG, said that some buildings are beginning to emerge from remediation programmes. Completion of remedial works to cladding and compliance with EWS1 forms is unlocking stock that was previously ‘trapped’, allowing these properties to be marketed once a valid EWS1 is received.

Leasehold Arrangements Under Scrutiny

Leasehold arrangements are also receiving greater attention from buyers. The Commonhold and Leasehold Reform Bill is still progressing through Parliament, and proposed caps on ground rents remain unconfirmed. The government has previously described leasehold as a “feudal” system and pledged further reform. Clarke highlighted that lease length is becoming a more prominent concern, with buyers more aware of the costs to extend a lease and the impact of lease terms on value, mortgageability, and saleability.