Current market conditions of stagnating prices, slower sales and higher taxes have made it far harder to make money out of a quick buy and sale.
The number of London homes being bought and sold in a year to make a quick profit has collapsed by more than 80 per cent since the “flipping” boom peaked before the financial crash, according to new research.
Across the capital just 1,240 houses or flats were sold on within 12 months of being purchased last year, a fall of 86 per cent since the 8,380 flipped in 2002.
In some boroughs flipping has virtually disappeared altogether with just six such transactions recorded in Islington and 10 in Camden and Kensington & Chelsea in 2018.
The phenomenon, which contributed to the rapid gentrification of many areas of London, was at its most popular in the early and mid Noughties.
Soaring prices, easy access to mortgage debt, and gazumping made it easy for “amateur developers” to make vast profits from hurried refurbishments of “fixer uppers”.
The craze was fuelled by property shows such as Sarah Beeny’s Property Ladder, showing how buyers could makes tens of thousands of pounds through flipping.
The biggest gains came as prices peaked in 2014 when a flipped property was sold for an average of £115,440 more than was paid for it.
But in the current market conditions of stagnating prices, slower sales and higher taxes have made it far harder to make money out of a quick buy and sale.
Aneisha Beveridge, head of research at agents Hamptons International, which compiled the figures, said: “Between 2000 and 2007 house prices were rising at an average annual rate of 13 per cent, 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.”
In Kensington & Chelsea the number of flipped homes dropped more than 90 per cent from 108 in 2004 to just 10 last year.
It was a similar story in Redbridge where numbers fell from 285 to 28 over the same period
https://www.homesandproperty.co.uk/property-news/flipping-property-drastic-fall-in-number-of-londoners-buying-and-selling-on-homes-for-a-quick-profit-a132496.html
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