For the first time in over a decade, London has become the UK region where homeowners are most likely to sell their properties at a loss. New research indicates a significant shift in the capital’s historically robust housing market, with a growing percentage of sellers realizing less than their initial investment.
London’s Shifting Property Landscape
Recent data reveals that around 15% of Londoners who sold their homes last year did so for less than their purchase price. This marks a significant departure from historical trends and places London at the forefront of loss-making property sales across England and Wales. The national average for such sales stood at 8.7% in the same period, highlighting the severity of the downturn in the capital.
Analysis by Hamptons indicates that the rise in loss-making sales is predominantly linked to owners selling flats. While flats constituted 60% of London sales in 2025, they accounted for a disproportionate 90% of homes sold at a loss. This is a notable increase from 78.4% in 2019.
Borough-Specific Trends
The data also points to significant variations within London itself. Eight out of the top ten local authorities with the highest proportion of loss-making sales are located in the capital. Tower Hamlets recorded the highest share, with 28.2% of properties selling below their purchase price, largely due to flats making up over 90% of sales in the borough. Other areas heavily impacted include the City of London (26.2%), Kensington and Chelsea (22.4%), Westminster (22.1%), and Hammersmith & Fulham (20.8%). In stark contrast, Barking & Dagenham, one of the capital’s most affordable boroughs, saw only 5.3% of sales made at a loss.
Expert Analysis and Future Outlook
David Fell, lead analyst at Hamptons, suggests that many sellers may have bought at the peak of the market between 2012 and 2016. “Over the next few years, more sellers are likely to have missed out on London’s 2012-16 house price boom, having bought instead at what turned out to be the top of the market,” Fell stated. “That could make trading up increasingly challenging.”
The research further highlights a widening gap between house and flat owners. While the average London owner still saw a gain of 59.6% over approximately 10.3 years, flat owners experienced a smaller gain of 35.4% over a similar period. Flat sellers were found to be six times more likely to incur a loss (22.2%) compared to house sellers (3.5%). This disparity is making it harder for flat owners to transition to purchasing a house.
Following London, the North East region of England experienced the second-highest rate of loss-making sales, with 13.9% of properties sold below their purchase price in 2025, though this represents a decrease from 29.9% in 2019.