The local authorities where sellers were most likely to make a loss after inflation were East Cambridgeshire (95pc of sellers), Oadby and Wigston (95pc) and South Norfolk (94pc).
Mr Fell said: “First-time buyers, who have taken over from investors to become the largest cohort of flat buyers, have increasingly chosen to rent a bit longer so they can purchase a house rather than a flat.
“Bigger stamp duty bills, rising service charges, and concern about longer-term price growth prospects have encouraged many to skip what was traditionally the first step on the housing ladder.”
In June, Zoopla found the gap between flat and house prices was at its widest in 30 years – disastrous for those on the bottom rung of the property ladder, especially if they end up losing money on their first sale.
Mr Fell added: “The ending of Help to Buy has also meant that many of the flats that were bought new with the benefit of a 20pc or 40pc interest-free equity loan are now being sold on second-hand to buyers at much higher interest rates and without the benefit of an interest-free equity loan.
“This means that these homes often change hands in cash terms for less than they were initially bought for.”
Last week Andy Burnham unveiled a new programme for buyers in England, allowing them to secure a 20pc equity loan for a new build home with a deposit of just 2.5pc.
Whether the scheme can help the thousands of flat owners stuck in loss-making homes remains the ultimate test for the market.
