Last week, financial commentators suggested that disillusioned buy-to-let investors might increasingly turn to property flipping as an alternative route to profit. Yet, a detailed new report from lettings agency Hamptons paints a far less optimistic picture of the flipping market in 2025, revealing it has become more challenging and far less rewarding than in years gone by.
In the first quarter of this year, homes flipped – meaning bought and sold again within 12 months – accounted for just 2.3% of all property transactions across England and Wales. This is the lowest proportion seen since the beginning of 2013, and it represents a sharp decline from 3.6% during the same period last year. More strikingly, the share of flipped properties has halved since its recent peak in 2017, highlighting a broader shift in investor behaviour and market conditions.
In absolute terms, only 7,301 flipped homes were sold across England and Wales between January and March this year. This figure is around 27% lower than the ten-year average of approximately 10,000 flipped properties per quarter, signalling that fewer investors now see quick resales as a worthwhile strategy.
While the average gross profit made on each flipped property stood at £22,000 during the first three months of 2025, this is still significantly lower than figures seen just a couple of years ago. Although this year’s gross profit figure is £6,000 higher than the equivalent figure from 2024, when house prices were falling, it remains well below the £38,000 peak recorded in 2022. The drop in profits is partly driven by slower house price growth and partly because investors are increasingly buying cheaper homes, which yield smaller gains.
From a percentage perspective, the average gross profit from flipping has dropped from 17% of the purchase price back in early 2015 to just 10% today. Economists attribute this decline mainly to weaker growth in house prices, which leaves less room for quick resale gains.
Perhaps the most significant factor eating into investors’ profits has been the sharp rise in stamp duty costs. In 2015, property investors paid the same stamp duty rates as owner-occupiers, meaning the average bill for an investment property was around £1,900. However, since the introduction of the 3% stamp duty surcharge on second homes, the average bill on flipped properties has soared by an astonishing 236% to reach £6,375 by early 2025.
This means that about 21% of the average gross profit from flipping is now swallowed up by stamp duty alone—more than double the 9% proportion recorded a decade ago. And this hefty tax bill comes even before investors consider the money spent on renovation works, legal fees, and other associated costs.
Adding further pressure, the nil-rate threshold for stamp duty fell back to £125,000 from £250,000 in April 2025. Based on current prices, this means the average investor considering flipping a property today could expect to pay around £11,920 in stamp duty. As a result, stamp duty now threatens to consume nearly 30% of the gross profit on a flipped home—before any refurbishment costs have even been incurred.
The average net profit after deducting stamp duty fell to £12,000 per flipped property in the first quarter of 2025, which translates into a modest net yield of around 7% on the purchase price. While this is up from £7,000 last year when the housing market dipped, it remains less than half the typical net profit seen a decade ago. In early 2015, investors were achieving net profits averaging £28,500, equivalent to a 16% yield.
These higher upfront costs and thinner margins have inevitably made flipping riskier and less appealing. Only 66% of homes flipped in the first quarter of this year made an actual profit once stamp duty had been paid—down from much higher levels seen in previous years. Once renovation costs and other fees are factored in, this percentage would likely be even lower.
Interestingly, the tax burden has shifted investor interest northwards. Regions like the Midlands, North of England, and Wales, where average house prices and therefore stamp duty bills are lower, have become more attractive. In the first quarter of 2025, about 61% of flipped properties were located in these areas, up from 50% a decade ago.
The North East in particular has emerged as a hotbed for flipping activity. Here, 4.7% of all homes sold in the first quarter of this year had been purchased within the previous 12 months—more than double the national average. The top three local authorities for flipping were all located in this region, including Redcar and Cleveland, which has overtaken Hartlepool as the most active local area.
One key reason for this trend is the abundance of lower-value properties in the North East. Properties bought for less than £40,000 are exempt from stamp duty altogether, making them especially attractive for investors. Nationally, 11% of flipped properties in the North East were purchased for under £40,000, compared to just 2% across England and Wales as a whole.
Properties bought below this threshold are significantly more likely to generate a profit: 87% of these very low-value homes turned a profit after resale in early 2025, compared to 66% of flipped homes across all price bands.
In contrast, flipping has become far less common in southern England, especially in London. Only 1.5% of homes sold in the capital in early 2025 had been bought within the previous year, down from 3.2% a decade earlier. Here, slower house price growth and a typical stamp duty bill of around £33,000 have combined to erode investor returns. In London, the average investor’s profit after stamp duty now stands at just 8% of the purchase price.
Looking at local trends, only two of the top 20 local authorities for flipping were located in southern England: Great Yarmouth in the East of England and Torridge in the South West. Both areas have seen increased activity compared to ten years ago, but overall, the South has become far less attractive for quick resales.
Commenting on these findings, Aneisha Beveridge, Head of Research at Hamptons, observed: “Higher stamp duty bills are wiping out a lot of profit from flipping. The 5% surcharge for second homes, alongside lower nil-rate thresholds, has made it harder than ever for investors to make the numbers work.”
She added that the combination of rising renovation costs, material prices, and slower house price growth means flipping is no longer the reliable, profitable strategy it once was. Investors are increasingly drawn to lower-priced properties in the North, where tax bills are smaller, and gross yields remain relatively higher—even if the overall profits in cash terms are lower.
In summary, while property flipping remains possible, it is no longer the golden ticket it once was. Higher taxes, weaker price growth, and increased costs mean that investors now need to be more selective, better informed, and willing to accept slimmer returns. For many, the golden era of easy flipping profits now appears firmly in the past.
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