I had a lot of trouble with this too. Couldn't get it working using the case examples above, but this does the job for me:
Replace(rtrim(ltrim(ISNULL(Flat_no, '') +
' ' + ISNULL(House_no, '') +
' ' + ISNULL(Street, '') +
' ' + ISNULL(Town, '') +
' ' + ISNULL(City, ''))),' ',' ')
Replace corrects the double spaces caused by concatenating single spaces with nothing between them. r/ltrim gets rid of any spaces at the ends.