After scrambling to get a toe on the housing ladder, many cannot afford to jump off. A typical inner London studio costing pounds 60,000 in 1989 would probably be worth only pounds 45,000 to pounds 50,000 today. Most have given up even trying to sell.
'We used to have around 500 on the books at any one time. Now we are lucky to have a couple of hundred, said Louise Schweitzer at Stern Studios, the small flats specialist.
Some frustrated sellers should look again, however. While most of us edge along in fear and trepidation, City workers have been coining in bonuses - which they are spending on property.
'We are back to the era when some young people are paying more than pounds 100,000 for a first home, said Ms Schweitzer. But the areas they choose are limited. 'They must be safe and have good travel connections, such as Hampstead, St John's Wood, Bayswater and Knightsbridge.
Outside these prime zones the market is creeping along much more slowly. One problem is that prices fell so far that buyers are leapfrogging small flats to take houses, or apartments with an extra bedroom. But there are still people interested in the lowest tier.
Petra Barrett, a City-based PA, is typical. She set her heart on a studio as a first foray into ownership. 'I was amazed at how few were available, she said.
It is not just first-time buyers scouring the streets. Investors realise there is a good return to be made out of buying flats to let out. Tenants have never been in short supply - as anyone who has tried to get in the first call to a smalls advert will tell you. There is always someone who gets in first.
But the property professionals are suddenly finding themselves thrust into similar queues. Ordinary people with a legacy to spend - or angry at the rock-bottom return on their savings account - are salivating over gross returns of 14 to 16 per cent from small flats.
A few years ago they would have trembled at the idea of becoming a landlord. Money could be tied up for years, because tenants were hard to remove. The creation of assured tenancies brings the law much more into balance, so property can be cleared and sold in an emergency.
Tom Trudgian of Stern Studios said the subsequent revival of interest in flats priced under pounds 35,000 is the fastest change in demand seen in 30 years.
Landlords are not always a saviour, however. In fact, they can inject extra pain into some tragedies - as Ms Barrett knows to her cost. She was half-way through buying a studio in Olympia when her solicitor suddenly told her to pull out because of the landlord.
The studio was one of around a dozen in a converted house. Like all flats, it was held on a lease from a freeholder. The law insists that there must be a single 'ground landlord who organises matters like maintenance and insurance.
Most are benign, distant individuals or companies who carry out these mundane duties in return for a ground rent and service charge. Some are crooks and incompetents, however, doing nothing for their money and at times swindling leaseholders.
Ms Barrett's prospective landlord was neither: in fact, he did not exist. 'The person listed as the freeholder had disappeared.
The other flat owners had paid no ground rent for years and were taking advantage of new laws under which they could buy out the freehold.
But Ms Barrett's solicitor warned that this could take years because no name was available.
'He said it might be unsaleable - which came as a shock to the seller.
She is now in the process of buying a different flat, relieved that she was warned off in time. But she is also angry. 'I lost pounds 500 in fees and costs.
'It is ridiculous that people selling property are not forced to have all the details and paperwork ready for potential buyers to prevent this sort of thing happening.
Many insiders feel the same way. Even the Law Commission has recommended that problems could be avoided if owners had to carry out structural surveys and title searches before putting their homes on the market.
Nor is the problem of disappearing landlords unusual. The law giving flat owners the right to buy out freeholders has led some unscrupulous freeholders to switch ownership in a bid to hold on to their property.
'There could be hundreds of cases like this happening across London but we don't hear about them because sales have been so slow over the last few years, said Ms Schweitzer.
Flat owners and buyers caught in this trap should not despair, said David Marcus of solicitors Franks Charlesley, which specialises in advising leaseholders.
'Firstly, you can trace a landlord through the name in the Land Registry. If that fails, residents can apply to the court for a vesting order. This involves the judge appointing someone to act as the landlord if the registered freeholder has disappeared.
'We had one block where the residents discovered the freeholder was a company in Monrovia. They did not know where the country was, let alone the owner.
This is little help to a buyer like Ms Barrett. The time involved chasing such as landlord was one reason why her solicitor recommended she pull out.
Another might have been pressure from the lender. 'They don't like getting involved where ownership is in dispute, says Mr Marcus.
This adds strength to Ms Barrett's plea for homes to be properly documented before they are put on the market.
Owners can do this, of course. In fact it is probably a good investment for sellers trying to get out of a flat which has become a burden.
You might not get more on the price, but at least you could attract a buyer like Ms Barrett.
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