Flipping Hell

The number of homes flipped in the U.K. was down 69% last year compared to its peak in 2004, according to a report released Monday by Hamptons International, a U.K.-based real estate agency.

Last year, 18,630 homes were sold more than once during a 12-month period, compared to 60,340 in 2004, the report stated. But the number of homes flipped last year was up 1.6% from 2017, when 18,330 homes were sold more than once.

Every region in the U.K. saw declining numbers of flipped homes since 2004, according to the report. London had the biggest decline, 81%, with the North West seeing the second-largest decline, 73%.

Many regions saw a small uptick in flipping between 2017 and 2018, although the number of London homes that sold more than once in 12 months dropped from 1.5% in 2017 to 1.4% in 2018.

The real estate market in the U.K. has been struggling as uncertainty over Brexit continues. London price growth has slowed, while prices in the north have outpaced the capital, Mansion Global reported earlier this month.

And the biggest increase in quick sales was in the North East, with the percentage of homes flipped increasing from 3.3% in 2017 to 3.6% in 2018.

Those who resold homes in 2018 within a year of purchasing them received an average of £30,150 (US$36,861) more for the home than what they paid, before taxes, Hamptons reported. That’s 32% less than so-called flippers made in 2004.

“Flippers tend to operate when house prices are rising, to really maximize their profits,” Aneisha Beveridge, head of research at Hamptons International, said in the report. “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 due to tax changes and slowing price growth in the U.K., those margins are narrowing, and becoming generally it’s harder for flippers to make as much of a return as before.