Property flipping plummets to a 12-year low as stamp duty costs soar

The practice of buying and reselling homes within a year, known as property flipping, has declined sharply across England and Wales, reaching its lowest level since 2013.

Research from Hamptons reveals that in the first three months of 2025, only 2.3% of homes sold were flipped, a significant drop from 3.6% in the same period last year.

It’s also half the peak seen in 2017.

This translates to just 7,301 flipped homes sold in Q1 2025, a 27% drop from the 10-year quarterly average of 10,000.

Flipping profits fall

The firm’s head of research, Aneisha Beveridge, said: “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.

“Stamp duty bills now account for nearly a third of gross profits.

“And in some cases, these bills are now higher than the cost of renovating the property.”

She added: “Rising upfront costs have pushed investors further North, where properties can still be bought without paying any stamp duty.”

Flipping was profitable 10 years ago

The financial returns from flipping have also taken a hit with the average gross profit standing at £22,000 in Q1.

That’s up £6,000 from last year but nearly half the £38,000 peak in 2022.

A decade ago, gross profits were higher, and the average profit margin has fallen from 17% in 2015 to 10% this year, largely due to sluggish house price growth.

Rising stamp duty costs have further squeezed profitability.

In 2015, investors paid an average of £1,900 in stamp duty when purchasing a property to flip.

By Q1 2025, this had surged by 236% to £6,375, consuming 21% of gross profits.

Following a reduction in the nil-rate stamp duty threshold to £125,000 in April, the average stamp duty bill for a flipped property is now estimated at £11,920.

The amount is equivalent to 30% of gross profits before renovation costs are even considered.

Modest returns for flippers

As a result, net profits have dwindled and in Q1, the average net profit after stamp duty was £12,000, yielding a modest 7% return on the purchase price.

This is a marked improvement from £7,000 in Q1 2024, when house prices were declining, but it remains far below the £28,500 net profit, a 16% yield, achieved in 2015.

Of the homes flipped in Q1, 80% sold for more than their purchase price, but only 66% were profitable after stamp duty.

With current stamp duty rates, this figure would drop to 59%, the lowest since the 2009 financial crisis.

Flippers are heading north

The North East has emerged as the epicentre for flipping, with 4.7% of homes sold in Q1 having been purchased within the prior 12 months – more than double the national average.

Redcar and Cleveland topped the list as the local authority with the highest proportion of flipped properties, overtaking Hartlepool.

Notably, 11% of flipped homes in the North East were bought for less than £40,000, where no stamp duty applies, leading to 87% of these homes turning a profit compared to the national average of 66%.

In contrast, flipping has become less viable in southern England, particularly in London, where only 1.5% of homes sold this year were flipped, down from 3.2% a decade ago.

Here, stamp duty bills equate to 23% of gross profits, and with weaker price growth, average returns are projected to fall to 8% after a £33,000 stamp duty cost.

Only two southern local authorities, Great Yarmouth and Torridge, ranked among the top 20 for flipping activity.

The shift northward is evident, with 61% of flipped properties in Q1 found in the Midlands, North of England or Wales, up from 50% a decade ago, Hamptons says.

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