House flipping is on the increase
The proportion of homes bought and sold within a 12 month period – also known as flipping – is now at the highest level since 2008 across England and Wales.
This year so far 2.5% of homes sold have been flipped within 12 months, according to Hamptons International’s analysis of Land Registry data. This means the number of flipped properties is likely to total around 23,000 by the end of the year.
Not only has the number of flipped homes increased but the profit from flipping has grown, despite the Coronavirus pandemic.
The average profit of £40,995 on flipped homes is likely due to a shift from flats to houses. Since the market reopened in May, just 5% of flipped homes were flats – a figure that’s down considerably from 20% in 2019.
The North East and North West of England are the areas where flipping happens the most. Burnley topped the list for the highest proportion of homes flipped for the sixth consecutive year, with 81% of flipped homes being bought for £40,000 or less which is under the stamp duty threshold.
According to Hamptons International, the top 10 local authorities with the highest proportion of homes flipped in 2020 are:
- Burnley: 8.2% of properties are flipped within 12 months of purchase, with an average increase in sale price of £20,643
- County Durham: 5.8% and £6,780
- Rutland: 5.8% and £45,269
- Middlesbrough: 5.5% and £6,100
- Stockton-on-Tees: 5.4% and £8,775
- Wolverhampton: 4.7% an £22,191
- Hyndburn: 4.6% and £26,410
- Merthyr Tydfil: 4.5% and £20,417
- Darlington: 4.5% and £11,549
- Walsall: 4.4% and £27,536
Aneisha Beveridge, Head of Research at Hamptons International, said: “Flipping generally involves buying, renovating and selling a home over a short period of time, in most cases for a profit. Flippers play an important role in the housing market by improving housing stock and taking on projects other buyers often won’t touch.
“Burnley has cemented itself in the top spot for the last six years as it’s one of the few places where investors can buy a home without paying any stamp duty. And while the current stamp duty holiday will see flippers across the country save money, its full impact won’t be felt until early next year when these homes are likely to return to the market for sale.
“Given investors in more expensive areas will see larger stamp duty savings, there is potential for Burnley to be knocked off the top spot before too long.”
