AIBU to be gutted my house has lost me money?

You need to recognise that what you've had is 8 years of paying no rent. Based on what you say re 200k loss due to inflation i am guessing you are living in a flat that cost 600-650k. That is likely worth probably £24,000 a year in rent, for 8 years, that is almost 200k.

Except the inheritance was free money so ..

What would your rent have been for the flat for 8 years, including rent rises to account for renovation?

Not a surprise, given the age range of many who can afford to buy, and that finally for many jobs some level of working from home has stabilised.

Anecdotally, I'm hearing of a lot of renters having to move because landlords are getting out of BTL because of changes in tenancy laws. If a lot of former BTL properties come onto the market in the next couple of years, that may well prevent growth in house prices.

On balance, I think significant growth in prices may be unlikely.

My brain is struggling to follow your mental gymnastics here. You are saying if you had not bought a house, and invested your cash in….something else, you would have made £200k more than you have by buying a house? But then where would you have lived?

if you’d rented a similar sized London property, at around £2-2500 per month, since 2017 that would be around £190-240k spent on rent. So all your investment ‘wealth’ would be more than wiped out by rent. You would be poorer. We’ve not even begun to think about such brickbats as the stock market crash caused by Covid, and then the one last month by Trump, which both wiped out nearly all the previous few years gains. The possibilities are endless as to how you could have made or lost money.

This is a nuts way to think about it.

I agree with other posters... You haven't lost anything, you have just not made the massive profit you wanted to. Some people before lockdown were buying properties in London, and several years later selling it with a £200K to £400K profit.

You had such a massive wadge of money given to you that you could afford to buy a flat in a swanky part of London, OUTRIGHT, and it hasn't brought any profit 8 years later. I can't find a single shred of myself that has an ounce of sympathy for you @Hotpinkparade

It’s not nuts. The London housing market is in decline.

Last year the capital registered zero increase overall in house prices, which have been sliding for the past three years.
House prices were £686,039 on average last year across the capital, 5pc lower than in 2022.

Prices in Westminster fell 3.5pc in 2024 to an average of just under £731,000, while those in the Borough of Ealing dropped by almost 5pc, to just under £560,000.

Declines of more than 3pc were also seen in Bromley, Kingston upon Thames, Enfield, Harrow and Southwark.

We’re in the same position OP. It’s a real issue if you want to relocate to other areas of the country that have continued to see house price rises. I used to think we would be able to buy a mansion anywhere else in the country after buying our London property in 2015. The reality is very different.

You've saved 8 years of rent then.

And if you stay in the area then prices will be equally stagnant for the sort of property you want to move to. So the absolute difference between the price you sell for and the price of the new property will be less than if there had been huge property price inflation.

I wonder why that is. Considering how expensive property is, you'd think flats would be in demand since they're often cheaper than houses.

Often the price of a flat in inner London is the same as a small house in outer London or unfashionable part of inner London. Lots of news about cladding, service charges & people want some outdoor space, etc.

All of the homes I have bought over the years the previous owners have lost money on. Great news for me, but also a great life lesson when I was first starting out. People always talk about property prices going up, it’s a shock when they go down…it is something you should always be mindful of.

Property prices increasing and making money on it isn't agiven. Either you overpaid when you bought it or the market hasn't increased. Just be grateful it hasn't decreased and you ended up in negative equity or something. You still have a roof over your head and equity built up from paying off the mortgage.

what's your point @viques?

I wonder why that is. Considering how expensive property is, you'd think flats would be in demand since they're often cheaper than houses.

It is 2025.

Why can’t you sell the second home, put that money together with your £328 equity, and take out a mortgage? I’m no mathematician but all together that should buy you a house.

Then you should have thought ahead and bought a house. You will never get a good return on flats, unless they are in Belgravia or equivalent.

Not true, people who bought them early 00s often made loads without doing anything.

We could all have made notionally far more money if we had put it into the S&P500 (until two weeks ago!) but you also need a place to live presumably. Perhaps what has killed some of your profit is the service charge. But 25k for a bathroom and kitchen and redecorating is not too much to invest in a property in that postcode. I feel the opposite of you and have been looking to upsize in a more established area as the prices there have continued to outstrip those in our ‘up and coming’ area which is now quite expensive in certain roads (including ours) but still about a million short for a similar house in the more ‘known’ area!

If you had to rent for 7/8 years you would have paid at least €50k depending on the rent.

Then you should have thought ahead and bought a house. You will never get a good return on flats, unless they are in Belgravia or equivalent.

🫣

If I'd inherited nearly 20 times the median after-tax UK annual household income, allowing me to live mortgage- and rent-free for 8 years, saving probably £150k in rent and interest, I would be pretty happy with that.

Also, there's no need for that amount of money to keep pace with regular (retail price) inflation, unless you're planning to downsize, retire early, and live off the money for monthly expenses. For most people with no mortgage, house prices and equity might as well be in a completely separate financial world. Maybe bread has gone up 50%, but as you are finding out, houses haven't, at least in your part of the country/city.

Thanks, OP.
I have recently read that the Covid effect on London flat prices has started to reverse as employers want staff back in the office. It may be worth doing some research and possibly holding onto your flat for another couple of years.