Dan Bermingham-Shaw, a 32-year-old resident of South London, has struggled to sell his studio flat despite pricing it slightly above its original purchase price. Having bought the property in 2022 for £225,000, he put it on the market in April 2026 for £230,000. However, after 90 days with no viewings or offers, even after reducing the price by £6,000 to £224,000, Bermingham-Shaw is considering withdrawing the listing.
This difficulty in selling small flats is reflective of a wider trend affecting one-bedroom and studio properties across the UK. According to data from property portals, a significant proportion of such units remains unsold due to a combination of pricing issues and affordability challenges among first-time buyers, who represent the key demographic for these homes.
Zoopla reports that 72 percent of one-bedroom flats listed in 2026 are still unsold nationally. The steep rise in mortgage rates, now typically above 5 percent compared with sub-2 percent rates in 2021 and 2022, has placed additional pressure on prospective buyers. Richard Donnell, executive director at Zoopla, noted that first-time buyers are particularly squeezed by these higher borrowing costs, as well as stamp duty changes that have reduced financial incentives.
Stamp duty thresholds have decreased since last year, when a holiday allowed first-time buyers to avoid paying tax on homes up to £425,000. Currently, the threshold stands at £300,000 for these buyers and has halved to £125,000 for other purchasers, further impacting demand.
Estate agents like Josh Endacott from 1st Avenue emphasize that many sellers continue to price properties based on market conditions seen during the recent buying peak, making it harder to attract buyers given the current supply and demand dynamics. “Buyers have more choice than at any point in over a decade,” Endacott said, pointing to the imbalance between high asking prices and buyer caution.
The introduction of the Renters’ Rights Act (RRA) earlier this year has also reshaped the housing market. By restricting no-fault evictions, limiting rent increases to once annually, and ending fixed-term tenancies in favor of rolling contracts, the legislation has prompted many landlords to exit the rental market. This change has led to an increased number of small flats — studios and one-bedroom units in particular — becoming available for sale.
Leasehold arrangements are compounding these challenges. Owners of leasehold flats typically pay service charges for upkeep and management of communal areas, which have risen steadily. Research from Hamptons revealed that the average annual service charge for flat leaseholders in England and Wales reached £2,405 in 2025, up nearly 5 percent from the previous year. Charlie Lamdin, founder of property website Best Agent, highlighted that these rising costs disproportionately affect one-bedroom flat owners, reducing the perceived value of their properties. “When the cost of ownership of an asset increases, it brings down the value of that asset,” Lamdin explained, noting that prospective buyers now hesitate due to escalating service charges.
The convergence of mortgage affordability issues, changing stamp duty rules, increased supply following rental market shifts, and rising service charges has created a challenging environment for sellers of small flats like Bermingham-Shaw’s, resulting in extended listing times and downward price pressure.