Lucy Pleasence bought a two-bedroom flat in Brixton, south London, in 2013 – at the height of a local property boom that became shorthand for middle-class gentrification, and saw protesters chanting “yuppies out” outside a wine and cheese bar. The 65-year-old and her husband paid £385,000 for the property and had every expectation that the value would only rise over time.
After all, the house in West Dulwich that they bought in 1995 for £135,000 had just sold for £985,000, representing a sevenfold increase in price. Why wouldn’t the place in Brixton be subject to the same market forces? “We bought this flat at the height of the Brixton boom – there were eight other people looking at it,” she says. So confident they were in the market, they offered £10,000 over the £375,000 asking price to secure the deal.
Now, in 2026, Pleasance and her husband have just sold for exactly the same price they paid for it. “At one point [these flats] were selling for £420,000”. So when they came to list earlier this year they were surprised the valuation was only £400,000. They asked the estate agents to list it for £425,000 anyway (they are moving to renovate in Hastings, East Sussex) but after two weeks the price was dropped, and later dropped again. The estate agent told her candidly: “If a flat doesn’t sell within two weeks, it’s going to be a really slow process.”
“It’s mad,” Pleasance says. Yes, the couple managed a sale of £385,000 in a crowded market, but it was a real-terms loss, and certainly didn’t give them anywhere near the gains of their previous property sale.
London bricks and mortar used to be a surefire investment, testament to the 19th century phrase “safe as houses”. People on middling salaries bought cheap properties in the 1990s only to discover, decades later, that sitting tight during a time of high demand and low supply had made them millionaires. And soon, buy-to-let landlords followed, buying up, renting out and making double the profit after selling. According to one study, the average price of a London property rose by 571 per cent between 1995 and 2019.
By 2016, the Bank of England’s chief economist, Andrew Haldane, said that without more housebuilding, prices would keep “relentlessly heading north”, and conceded that property was a better investment than pensions. However, a lot has changed since then, and property prices are now stalling.
While the average UK house price has flatlined, according to the latest Lloyds index, London recorded the “largest annual decline”, down 2.5 per cent year on year. So what happened to the London property dream? And who misses out as a result?
Emma*, 38, has just been stiffed by a potential buyer. In 2016, her parents bought her a two-bed flat in west London for £895,000 and “hoped it would be an investment” as well as providing security for her. “They didn’t want me to be dependent on other people as a renter, they wanted me to have control and certainty. And they were hoping it would at least hold its value.”
A decade on, and newly married, Emma is looking to move to a larger home where she and her husband can start a family. “We were told that Christmas is a really good time to list because everyone wants to get divorced, so they’re all on Rightmove.” However, after listing it on 24 December last year at £900,000, just £5,000 more than the purchase price, no one was biting.
“So we slashed the price, had an offer for £875,000, accepted it, but then that fell apart. Then we were offered £850,000 cash and figured we’d accept it [as] it’s such a difficult market.”
Last week, that fell apart too, after the cash buyer said they believed the flat needed £100,000 of work. Unwilling to knock the price down that far, Emma is now waiting for another buyer to come along. “I’m still one of the lucky ones, but I do feel quite trapped, and we’ve lost tens of thousands in solicitors’ fees for failed sales.” She points out that in Scotland, once you’ve made the offer, there is a financial commitment, and would like that in England and Wales too.
“It feels like the [London property] promise has been broken a bit,” explains Brian Swint, a former financial journalist turned mortgage broker. “For decades, everyone was investing in London flats… taking a big Victorian or Georgian house, splitting it into flats and using that as an investment. So there was a great supply and then a huge demand of people coming in to buy them.”
Now, however, “the property market for flats is incredibly weak”, he says. This all started, according to Paolo Ulivi, who runs Pickwick Estates, a south London estate agency, around a decade ago. “Brexit was the first event that created stagnancy in the market. Then during Covid there was a flood of flats that came on the market because people had been cooped up without gardens and were desperate to get out. Or they needed an office, or they wanted to move to the countryside because they didn’t have to go into the office.”
That was, Ulivi says, “the first time I started seeing people willing to take less than what they bought for, because they just wanted out”. Then came Liz Truss and Kwasi Kwarteng’s mini-Budget. “And by November 2022, interest rates went up. Meaning that anyone who had bought a flat in 2021 during the [Covid-era] stamp duty holiday, their flat wouldn’t be worth so much anymore.”
And this year, the Renters’ Rights Act came in, “and landlords are exiting the market and have saturated it with another wave of flats”. The result? “People are accepting 5 to 10 per cent less than what they bought for, so I’ve seen £500,000 flats going for £450,000. It’s mad to think that, if you’ve bought a flat in the past 10 years, you’ve not made any capital growth.” Ulivi says.
As for the option for owners to rent out properties, Swint says: “Everyone realises having this London flat is a burden now rather than a benefit. Some are just going to remortgage and hang on for a few more years, and some are going to try and sell up at whatever price they can get. But neither [group] are very happy about it.”
The knock-on effect is broad, Swint says: “The pain of London flats isn’t just felt in London. Everybody goes to London to make their fortunes when they’re young and then maybe move out, but they sometimes keep a flat, and now they’re kind of feeling like they’re stuck with it.”
This means it’s not just buy-to-let landlords feeling the pain. Owner-occupiers like Pleasence and Emma are selling at or below what they paid, and landlords who kept a flat when they left London are stuck unless they want to sell at a loss. For Emma, “the stress is that the process is so slow and so long and feels so uncertain. The first time round I was so emotionally invested and so stressed by it, because I had such an anxiety to move. But now I’ve become hardened… but ever since the beginning of the year I’ve had low-level anxiety about the flat.”
Plenty of renters may have no sympathy, but the issues affecting owners still touch tenants, as Swint explains: “While flat prices are falling in real and nominal terms… unfortunately, they’re still probably too expensive for most first-time buyers who would want to get in there.” Indeed, the average London property is still worth 10 times more than the average Londoner’s salary.
In addition, Ulivi says: “There are no rental properties now. We put a rental on the market and we’re inundated by tenants, we get to choose the best one. How is that helping those who need that help?”
Stamp duty and interest rates, both Ulivi and Swint agree, need to be amended, but one task may be easier than the other, and Swint concedes: “I don’t think there’s a silver bullet or one magic stroke to make it better”.
In the meantime, both Pleasence and Emma have become sanguine about their situations. Pleasence explains that while “it’s not great, at least [our flat] sold, because a lot of people are in much worse positions, selling under what they bought their flats for, and also not even selling at all”.
While Emma still waits for the sale of her flat, she acknowledges her parents have passed on some wisdom along with that hefty chunk from the Bank of Mum and Dad. “My dad said, ‘If you’re lucky enough to have investments, you’ll know some are great and can exceed what you could ever have imagined. And some that you hope will be valuable turn out not to be.'”
A Government spokesperson told The i Paper: “Our landmark Renters’ Rights Act gives tenants more security by banning no-fault evictions and giving renters stronger powers to challenge excessive rent hikes.
“We’re fixing the broken homebuying and selling process in London and across the country to make it faster, cheaper and less stressful for people, while our Your First Home scheme will reduce deposits and boost the number of high-quality new homes.”
*Name has been changed.