The Telegraph is reporting that bigger tax bills wipe out profits from flipping property.  It can be seen here, and says

Chancellor Rachel Reeves’s decision not to extend the stamp duty discount has dealt a heavy blow to short-term property investors, with property flipping profits shrinking and activity falling to its lowest level in over a decade.

According to Hamptons, only 2.3% of homes in England and Wales were bought and resold within a year in the first quarter of 2025—the lowest level since 2013.

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Profit Margins Squeezed

• The average stamp duty bill on flipped homes has more than tripled in the past decade, rising from £1,900 to £6,375.

• Stamp duty now consumes around 30% of a typical flipping profit.

• The average gross profit on a flipped home is now £22,000, down significantly from a £38,000 peak in 2022.

Many flippers are finding that stamp duty bills now exceed renovation costs—a once-unthinkable scenario in this traditionally high-return corner of the market.

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What Changed?

• The temporary stamp duty discount, introduced in 2022, expired in April 2025.

• Reeves raised the second home surcharge from 3% to 5% in her first Budget—targeting landlords and flippers to favour first-time buyers.

• The nil-rate band has returned to £125,000, having previously been lifted to £250,000 under Truss and Kwarteng.

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Who’s Still Flipping?

Flipping is increasingly viable only in the North, Midlands and Wales, where house prices and stamp duty costs are lower. Hamptons reports that:

• 61% of all flips in early 2025 occurred in these regions (up from 50% a decade ago).

• Southern flips—once the most profitable—have become far less attractive due to larger tax burdens and stagnant price growth.

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Industry View

“Bigger stamp duty bills are wiping out a lot of profit from flipping. In some cases, these bills are now higher than the cost of renovating the property.”
— Aneisha Beveridge, Head of Research at Hamptons

The policy has succeeded in its political aim: deterring second home purchases and reducing competition for first-time buyers. But it’s choking off investment in vacant or dilapidated stock that requires modernisation—properties often unsuitable for first-time buyers anyway.

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Looking Ahead

Letting agents and property professionals should expect:

• Fewer short-term investors entering the market.

• Reduced turnover in older stock that typically benefits from refurbishment.

• More demand for long-term investment strategies as flippers exit.

Landlords considering buy-refurbish-rent (BRR) strategies must factor in reduced margins and higher upfront costs, especially in southern England. Stamp duty is no longer just a transaction cost—it’s now a major threat to profitability.

Here’s a South East region breakdown focused on property flipping, based on Hamptons research for Q1 2025 — formatted for a newsletter aimed at investors, agents, or property professionals:

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South East England: Flipping Market at a Glance (Q1 2025)

Hamptons’ latest data sheds light on property “flipping”—buying and reselling within 12 months—in the South East region. While flipping activity is declining nationwide, what remains is becoming increasingly unprofitable.

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Flipping Activity: South East vs National Average

• In the South East, just 1.8% of homes sold were resold within a year—virtually matching the national average of 2.3% (for England & Wales)

• In contrast, the North East leads the market with 4.7% of homes flipped—more than double the South East level.

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Gross Profitability: Thin Margins

• Average gross profit (sale price minus purchase price, before costs) in the South East stands at about £23,000, representing roughly 7% of purchase price.

• This is lower than the national average of £22,000 (also ~7%) and substantially below returns in other regions such as Wales (~17%) and the North West (~16%)

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Why Flipping Is Struggling in the South East

• High property values and stamp duty: Elevated sale prices translate into larger tax bills, which erode the slim margins.

• Weaker house price growth across southern regions: Particularly in London and the East of England, lower growth has reduced resell appetite and profit potential.

• Higher renovation costs: Rising material, labour and compliance costs eat into investor return.

Only 66% of flipped homes nationwide made a profit after accounting for stamp duty—down from 80% in gross terms

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Strategic Implications

For investors, letting agents, and developers in the South East:

• Flipping is increasingly marginal. A net profit of just £12,000 per project (approximately 7%) leaves little room for error.

• Tax and cost spikes are key deterrents. Compared to the North and Midlands, where lower entry costs and modest renovation expenses yield healthier returns.

• Market shift underway. With more property investment pivoting northwards, demand and margins are sliding south.

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Summary Table

Expert Insight

“Rising upfront costs and taxes have pushed investors further north. While returns in the North remain lower in cash terms, the yield and tax environment are substantially more forgiving.”
— Aneisha Beveridge, Hamptons research lead

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