Property flipping loses momentum as investors rethink short-term strategies – The Intermediary

Property flipping is continuing to lose ground as an investment strategy, with new data showing activity has fallen to its lowest level in more than a decade.

Research indicates that in the first quarter of 2025, just 2.3% of homes sold in England and Wales were flipped, the lowest proportion recorded since 2013. The decline reflects a combination of rising costs, higher taxes and shifting market dynamics that have eroded the margins that once made flipping attractive.

Changes to Stamp Duty have played a significant role. Recent Budget measures increased the surcharge on second homes and investment properties to 5% and removed temporary reliefs, pushing average tax bills higher and placing greater pressure on short-term returns.

BuyAssociation founder Caroline Marshall-Roberts said flipping had not disappeared, but had become far more specialised.

She said: “It’s still viable, but it’s definitely become more specialised. Previously, those with little experience in property investment could buy fixer-uppers and turn a decent profit with relatively minimal risk.

“Now, rising costs such as stamp duty are eating into those profits. When the average gross return from flipping is around £22,000, and stamp duty alone can swallow more than half of that, you have to be very strategic.”

Marshall-Roberts added that the traditional approach of buying cheaply, renovating and selling quickly was becoming harder to execute. Labour and material costs, she said, could “quickly erode margins, and even eliminate them entirely if you’re not careful”.

In contrast, she noted that many investors are now finding stronger and more predictable returns through buy-and-hold strategies. “In the current market, many investors are seeing stronger, more stable returns from long-term buy-and-hold strategies. Rental demand is high in key regions, and steady capital growth can offer better value than a risky flip,” she said.

Stamp Duty, she said, had become a non-negotiable consideration for anyone assessing a potential flip. “You need to run the numbers before you even view a property,” she said, pointing to the reversion of the Stamp Duty threshold from £250,000 to £125,000 from 1st April.

“If your flip goes over the £125,000 mark – and most do – you’re facing a substantial upfront tax, plus a 5% surcharge for second homes and investment properties. What’s more, it’s payable within 14 days of completion, so cash flow is critical.”

For newer investors, Marshall-Roberts said lower-value properties in high-growth areas could still offer opportunities, particularly across parts of the North and Midlands where entry prices remain lower but growth prospects are stronger.

She advised flippers to focus on properties requiring cosmetic improvements rather than major structural work, and to prioritise locations with strong rental demand and good transport links. Auctions and off-plan purchases, she added, could also provide alternative routes to profit, reducing renovation costs and execution risk.

Marshall-Roberts warned first-time flippers against being influenced by social media portrayals of easy profits. “Too many people get swept up by TikTok renovations and try to replicate them blindly,” she said.

“Focus on the postcode, understand your target buyer, and calculate every cost, including a 10–15% contingency. And vet your tradespeople thoroughly. Reliable professionals who deliver on time and within budget can make or break your flip.

“Flipping isn’t the easy win it once was. But with the right mindset, it can still pay off.”