Property flipping (that’s a home bought and sold within 12 months) has fallen out of favour. This is according to our latest research which shows that the proportion of flipped properties across England and Wales in the first three months of this year was the lowest for 11 years (so back to 2013).
In number terms, this translates to 7,301 flipped properties in the first quarter of 2025 (Q1 2025), some 27% below the 10-year average of 10,000 homes for the first quarter of a year.
The reason behind the fall? Well, this is linked to the average gross profit (that is the difference between sale and purchase price) earned on a flipped property, which has been steadily eroded.
In Q1 2025 the average gross profit on a flipped property in England and Wales was £22,000. And while this might be slightly higher than the previous year, it is significantly lower than the most recent peak of £38,000 achieved in 2022.
To put it another way, in percentage terms, the average gross profit made by an investor flipping a home fell from 17% in Q1 2015 to 10% in Q1 2025. Weaker house price growth is the primary reason for the fall and stamp duty (SDLT) reduces margins further down the line.
Stamp duty is becoming increasingly costly and it’s eating into investor profits. Back in 2015 an investor would have paid the same SDLT on a property as someone buying a home in which to live (an owner-occupier). This meant that the average SDLT bill in the first quarter of 2015 amounted to £1,900. But since then, there have been many stamp duty changes, most notably the introduction of Higher Rates for Additional Dwellings (HRAD).
This means that the average SDLT payable on a flipped home in the first three months of this year has increased significantly. In fact by 236% compared to Q1 2025. Or to put it another way, an investor who sold in Q1 2025, saw an average (median) 21% of their gross profit go towards paying stamp duty.
Furthermore, in April 2025 the nil-rate SDLT threshold fell to £125,000 from £250,000. Based on Q1 2025 sales, the average SDLT bill for an investor contemplating flipping a home today will rise to £11,920. Assuming no behavioural change, SDLT now costs the average person flipping a home in England and Wales a record 30% of their gross profit. And this before any money has been spent on improving the property.
Profit margins are clearly getting thinner. In fact, in the first quarter of this year, the average net profit (gross profit – stamp duty) made on a flipped property fell to £12,000. This represents a net return of 7% on the purchase price. To contrast, in Q1 2015, the average gross profit equated to £28,500 or a 16% net return. It’s no surprise that as a consequence, the number of flipped homes has fallen.
Of all the homes flipped across England and Wales during the first quarter of this year, 80% were sold for more than they were bought for; however, just 66% made a profit on resale after paying stamp duty. Higher building material and labour costs, alongside slower house price growth, have also weighed heavily on investors. Flipping increasingly only stacks up in the Midlands and North of England, where property prices and, therefore, stamp duty costs are lower.
In the first quarter of this year, 61% of flipped properties were in the Midlands, North of England or Wales, up from 50% a decade ago (before the stamp duty surcharge on second homes was first introduced). The North East, the cheapest region in the country, remains the hotspot for flipping. Here, 4.7% of all homes sold in Q1 2025 had been bought within the previous 12 months, more than double the national average.
The three local authorities with the highest proportion of flipped properties were all located in the North East, with Redcar and Cleveland replacing Hartlepool as the most common local authority for flipping in Q1 2025. The North East is also the only region where flipping has become more common over the last decade. It is no coincidence that this region has a prevalence of homes costing less than £40,000.
Below this price, a home doesn’t incur any stamp duty costs, regardless of whether it is a second home or not. In the North East, 11% of homes flipped in 2025 were bought for less than £40,000, compared to the national average of 2%. This stamp duty saving meant that across England and Wales in Q1 this year, 87% of homes bought below £40,000 turned a profit after being flipped, compared to 66% for all homes at any price.
Meanwhile, the more expensive regions of the South of the country - namely London, the South East, and the East of England - have seen the biggest declines in the share of flipped homes. London ranks bottom, with just 1.5% of homes sold this year being bought within the previous 12 months, down from 3.2% a decade ago. Here, the typical stamp duty bill was equivalent to 23% of the average gross profit.
Weaker price growth in the capital has also weighed on investor returns. Based on today’s stamp duty rates, the average investor’s return is likely to fall to 8% after paying £33,000 in stamp duty for a flipped property in London. Just two of the top 20 local authorities for flipped homes this year were based in the South of England: Great Yarmouth in the East of England, and Torridge in the South West. Ten years ago, Great Yarmouth was 33rd and Torridge was 192nd.
