Flipping has flopped in England and Wales, new study shows

The number of homes in England and Wales sold more than once within a 12 month period, known as flipping, has fallen dramatically overall since its peak in 2004, new research shows.

Last year 18,630 homes were flipped in England and Wales, some 69% less than the 60,340 homes flipped in 2004. However, between 2017 and 2018 the number of flipped homes increased 1.6%, according to the study from Hamptons International.

It points out that despite the year on year increase, flippers now make up a smaller part of the housing market compared to historic standards. In 2004 some 4.8% of homes sold in England and Wales were flipped within 12 months but this proportion has fallen gradually ever since and last year just 2.1% of homes were flipped in England and Wales, although this is 0.1% more than in 2017.

In 2018, some 3.9 billion worth of property was flipped, £0.2 billion less than in 2017 and half the value of the sector in 2004 when it was £8.2 billion. Last year £0.6 billion of homes in London were flipped.

The average flipper sold their property for £30,150 more than they paid for it (pre-tax), which equates to a 22% average gain in England and Wales. However, this is less than the 32% average gain made in 2004 at a time when house prices were rising faster than they have been in the last few years.

The number and proportion of homes flipped has fallen in every region since 2004. London saw the biggest drop in the number of homes flipped since 2004 with a fall of 81%, followed by the North West with a decline of 73%. The North East is still the region with the highest proportion of flipped homes, with 3.6% of homes sold more than once in 2018.

However, between 2017 and 2018 every region other than London recorded a small increase in the percentage of homes flipped. The North East saw the biggest increase, with the proportion of homes flipped in the region rising from 3.3% in 2017 to 3.6% in 2018. Meanwhile the proportion of homes flipped in London fell from 1.5% in 2017 to 1.4% in 2018.

Burnley has often been the local authority with the highest proportion of homes flipped. Last year 11.2% of homes sold in Burnley were bought in the previous 12 months, followed 6.1% in Wolverhampton, 5.4% in Hyndburn in Lancashire and 5.1% in the London borough of Hackney. But it was the first time in two years that a London borough was in the top 15 local authorities with the highest proportion of flipped homes.

‘The art of flipping generally involves buying, renovating and selling a home, in most cases for a profit. Flippers play an important role in the housing market by improving existing housing stock and bringing empty homes back into use. Yet the number of flipped homes has fallen considerably since its heyday in the early 2000’s,’ said Aneisha Beveridge, head of research at Hamptons International.

‘Flippers tend to operate when house prices are rising, to really maximise their profits. Between 2000 and 2007 house prices were rising at an average annual rate of 13%, so there were plenty of opportunities for flippers to make profits. But following the financial crash price growth has slowed, and this combined with tax changes has meant that generally it’s harder for flippers to make as much of a return as before,’ she added.