How you can still make money from flipping property

Yahoo

11 hours ago

In the Nineties and Noughties, a significant number of property investors — and ordinary owner-occupiers — were making large amounts of money from buying properties in need of refurbishment, doing them up quickly and selling them on at a profit, aka flipping. But, 20 years on, this practice is much less common.
According to recent figures from Hamptons Research, in the first quarter of 2025, the proportion of homes bought and then re-sold within a year (ie flipped) fell to 2.3% across England and Wales, down from 3.6% in Q1 2024. This equated to 7,301 flipped homes in Q1 2025, 27% below the 10-year Q1 average.
The average profit of these Q1 2025 flips was £22,000 and Hamptons found that while 80% of flipped homes were sold for a higher price in Q1 2025, only 66% made a profit.
So, how can you still make money from flipping? We spoke to several experts to find out.
Why has flipping property become less profitable?
While there are several factors eating into flippers' profits, the main one is stamp duty. Not only have rates increased over the last 20 years, but property price inflation means that more properties are liable for this tax, while investors with multiple properties have to pay stamp duty at an additional rate.
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'Bigger stamp duty bills are wiping out a lot of profit from flipping. The 5% surcharge for investors, coupled with a reduction in the point at which buyers start paying stamp duty, means it's harder than ever to make the sums stack up,' says Aneisha Beveridge, head of research at Hamptons.
The average stamp duty bill which was once around 10% of a flipper's gross profit, now swallows up around 30%.
'As recently as 20 years ago the highest rate of stamp duty was 2%. Now it is 12%, plus an extra 2% if you are an overseas buyer and an additional 3% if you own a property anywhere else in the world. So, you could be paying as much as 15% of the value in tax,' flags Marc Schneiderman, director, Arlington Residential.
Renovating a property has also become more expensive, meaning investors need to pay out increasing amounts initially.
'Renovation costs have also risen, while inflation in both labour and materials, along with new compliance requirements such as energy efficiency standards, has increased upfront investment and overall project risk,' says Caroline Marshall-Roberts, CEO and founder of BuyAssociation.
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Sarah Walker, owner of Walker Hall Estate Agent, gives the example of a kitchen refurb. 'A kitchen that might have been £8,000 just a few years ago can easily come in at £15,000 or more once you factor in appliances, fitting and VAT.'
What's more, the reduction of the capital gains allowance and stricter rules on what can be claimed on this make tax-efficient renovations difficult. 'Combine this with uncertain market timing and tighter lending conditions, and today's property investors looking to flip properties are dealing with thinner margins and greater exposure to downturns,' adds Marshall-Roberts.
Which areas of the UK are still profitable when it comes to flipping?
There are still areas of the country where you can flip and make a profit. According to Hamptons Research, the North East is the only region where flipping has become more common over the last decade. This is predominantly due to the prevalence of homes costing less than £40,000, well below the stamp duty threshold of £125,000.
'We still see some success in parts of the North West, in particular in certain areas of the Wirral, where property prices are lower and demand is steady,' says Liam Gretton, Bespoke Estate Agent. 'Buyers are also looking in areas with planned regeneration, where prices are starting to rise.'
While there are general regional patterns of flip profitability, Walker believes it's more likely that a good hyper-local knowledge will help you find a suitable property.
'You need to understand which streets, which styles of homes, and which improvements genuinely add value in your patch. Forget national 'hotspots.' Success comes from knowing your area inside out and running the numbers with zero room for guesswork.'
What types of houses are good for flipping?
In terms of what makes a successful flip property, many of the age-old rules still hold true. 'Probate sales, long-held family homes or rentals that haven't been touched in decades are the sweet spot. Dated kitchens, pink bathrooms, swirly carpets, all perfect,' suggests Walker.
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With the cost of renovations high, you're looking for properties that have good bones, are structurally sound and just need cosmetic modifications.
With the age of first-time buyers increasing, larger, family homes are increasingly in demand and, therefore, have more flip potential.
'Investors looking to flip property should focus on three- or four-bedroom semi-detached houses. These homes tend to appeal to families and young professionals, increasing the likelihood of a quicker sale and a stronger return,' says Marshall-Roberts. 'Terraced houses and standard flats in residential blocks can also make good flip candidates.'
In contrast, luxury homes with large stamp duty bills come with higher stakes attached.
'High-end homes or unusual properties are harder to flip quickly and carry more risk,' says Gretton.
While flipping can be seen as a way of making a fast buck, Gretton flags that there are hidden benefits and that it has its place in the property market. 'It brings older or neglected homes back to life, creating more modern, liveable spaces that are ready for today's buyers or renters. It also helps maintain and support local property values especially in areas where tired housing stock might otherwise drag the market down.'
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