Property flipping is being squeezed out of the market with higher stamp duty and thinner margins reshaping deal viability across England and Wales.
The number of homes bought and resold within 12 months has halved over the past decade, falling from 21,520 in 2016 to 10,570 in 2025. Flips now account for just 1.5% of all transactions, the lowest share in more than 10 years.
Returns have been hit hard. Average post-stamp duty profit has fallen from £36,500 in 2015 to £16,390 in 2025, a decline of more than 55%. Stamp duty alone now absorbs 43% of gross profit, equating to around £12,400 per deal.
While 73.3% of flips still generate a gross profit before tax, this drops to 58.7% once stamp duty is factored in. The data suggests that after refurbishment and finance costs are included, a significant proportion of projects are likely to be marginal or loss-making.
MATERIAL SHIFT
Short-term lending has historically underpinned refurbishment-led exits but tighter margins are forcing brokers and borrowers to be far more selective on deal entry, pricing and location.
Regional divergence is now driving opportunity. The South has seen the sharpest deterioration, with post-SDLT profits down as much as 80% in the South West since 2015, while London margins have also compressed significantly.
By contrast, the North East has emerged as a rare bright spot. It is the only region where post-SDLT profits have increased over the past decade, up 27%, supported by lower entry prices and stronger relative house price growth.
This has shifted flipping activity towards lower-value stock. Properties purchased for under £100,000 delivered the strongest returns in 2025, with 86% turning a profit and average gains of 45.8%. At the top end, profitability collapses, with just 28% of properties above £350,000 making a profit and average returns turning negative.
UNINTENDED CONSEQUENCES
Aneisha Beveridge (main picture, inset), Head of Research at Hamptons, says: “Flipping is no longer the profitable venture it once was. There was a time when rundown properties could be bought cheaply, refurbished, and resold at a healthy margin. Today, however, second home stamp duty absorbs nearly half of all gross profits, significantly eroding returns.
“The surcharge was not primarily intended to penalise ‘house flipping’; its primary aim was to support first-time buyers. While it has largely succeeded in that goal, it has left flipping unviable across much of the South of England. These projects deliver much-needed move-in-ready homes, sparing buyers the financial risks and expertise to undertake major works themselves.”
SQUEEZED RETURNS
And she adds: “Falling house prices across many Southern markets have squeezed returns further, while the cost of materials and labour have risen sharply since the pandemic.
“Even before factoring in stamp duty, refurbishment budgets now stretch much further than they once did, pushing profit margins to their thinnest levels in over a decade.
“In contrast, the North – particularly the North East – has remained far more resilient. Lower entry prices keep stamp duty bills modest, meaning more scope to add value through refurbishment. Combined with strong local house price growth, this has created a rare pocket of the country where flipping can still deliver healthy returns.
“Unless a flip is supported by strong underlying house price growth, turning a profit is becoming increasingly difficult. That said, investing in relatively cheaper property in an area where house price growth is strong can still yield solid returns.”
