Flipping profit: Share of homes sold twice within a year is highest since 2008

The proportion of homes being flipped – sold twice within 12 months – is at its highest levels since 2008, a study has found.

Flipping a home is a way for property investors to turn around a quick profit, perhaps giving the home a makeover before putting it back on the market.

And despite the coronavirus crisis, the average profit being made from a flipped home across England and Wales is £40,995, according to the analysis from Hamptons International.

It said so far this year, 2.5% of homes sold have been flipped – a figure which is likely to equate to around 23,000 transactions by the end of the year.

The 2.5% is the highest proportion of transactions being flipped since 2008, when 3.3% of properties were flipped.

In 2019, 2.4% of homes sold had been bought inside 12 months, equating to 20,857 properties.

The local authority area of Burnley in Lancashire has seen more homes flipped in 2020 than in any other area in England and Wales – making it the flipping capital for the sixth year in a row.

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.”

Hamptons estimates that nearly one in 10 (8.2%) homes sold in Burnley this year were flipped.

The North East and North West of England regions continue to see high proportions of homes flipped, it said.

Lower house prices in some parts of the North, meaning a smaller initial cash outlay, may attract investors.

Hamptons estimated that eight in 10 (81%) of homes flipped in Burnley this year were bought for £40,000 or less. The bulk of these purchases were for terraced houses.

The average gross profit made on homes flipped in Burnley was £20,643 in cash terms, or 44%.

Ms Beveridge added that the current stamp duty holiday could eventually knock Burnley off its top spot.

She said: “Burnley has cemented itself in the top spot for the last six years as it’s one of the few places where investors can purchase 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.”

Here are the top 10 local authority areas with the highest proportions of flipped homes over the past year, according to Hamptons International:

1. Burnley, 8.2%

=2. County Durham, 5.8%

=2. Rutland, 5.8%

4. Middlesbrough, 5.5%

5. Stockton-on-Tees, 5.4%

6. Wolverhampton, 4.7%

7. Hyndburn, 4.6%

=8. Merthyr Tydfil, 4.5%

=8. Darlington, 4.5%

10. Walsall, 4.4%