Homes Under the Hammer is lying to you.
Flipping is at a 10-year low. The maths explains why.
We had a call with a potential client last week. Let’s call him Karl. Karl was confident, experienced… and not at all interested in working with us.
The reason? He has his own strategy.
“I just look for below market value,” he told us. “I buy it, and I flip it. Put a new bathroom in, new windows, and just keep it moving. Simple.”
He’s not alone. Thanks to shows like Homes Under the Hammer, there’s a generation of would-be flippers who’ve been raised on a steady diet of success stories.
But what daytime TV doesn’t tell you is that it’s a strategy the market has been punishing for years.
Daytime TV is lying to you
Flipping is at its lowest point for a decade, according to Hamptons. That decline isn’t because people like Karl are buying bad properties or doing bad renovations. It’s because Stamp Duty now swallows 30% of your flip profit.
That’s almost half of your hard-earned gains, gone before the paint’s even dry.
Let’s say that Karl picked up his last flip for £150,000. Stamp Duty, including the 5% investor surcharge, costs £8,000. The refurb, presuming there aren’t too many surprises (which we all know there will be), probably runs between £15,000 and £25,000. Then there’s agent and legal fees, tax on the profit, not to mention the cost of finance while he’s holding the property.
Add it all together, and the property value needs to go up substantially just for Karl to break even for his time. And in a market that’s flatter than a pre-assembly IKEA bookcase, that’s far from guaranteed.
Investing and urgency are natural enemies
Which brings us to the central assumption behind every flip. Your success isn’t just tied to your renovation skills, it relies on the white-knuckle experience of riding the wave of a moving market while you work.
There is another way, however. One that doesn’t require stressful refurbs or threading the needle of market timing to turn a profit.
Buy and hold sounds like a boring alternative, but it’s incredibly effective. It’s an approach that lets time do the heavy lifting as leverage compounds the gains. And you only pay the costs once. Stamp Duty, legal fees, the refurb itself – flippers face those costs with every single project. And the busier they are, the more they have to pay. It’s a self-fulfilling cycle that drains their profits.
Buy-and-hold doesn’t mean you can’t spend some quality time with your claw hammer. You can still add value, but then hold and refinance instead of selling. Because while turning a profit with a flip isn’t impossible, the stats show that you’ll be fighting the market to do it.