With the limited market of houses that have the opportunity to release profits quickly, along with interest rates having risen among other factors, experts have shared their views and opinions on whether they believe the days of the property flipped are over.
Their views are stated below:
Jamie Alexander, Mortgage Director at Alexander Southwell Mortgage Services, said “The surge in material, labour and mortgage costs has made many property flips unappealing on paper, leading the average flipper to put a firm brake on future activity. Moreover, with the uncertain state of house prices this year, potential buyers may choose to hold off on purchases until prices drop further or until they can accurately predict the market’s behaviour to avoid potential resale price losses.”
Adam Smith, Founder at Alfa Mortgages, said “If I had a pound for every time I’ve heard someone claim they’ll be a property millionaire in just three months by flipping houses, I would be lounging on a beautiful beach in Barbados by now. Unfortunately, this get-rich-quick mentality is a relic of the 1990s, perpetuated by flashy property courses that promise more than they can deliver. In reality, flipping properties is a complex and difficult business that requires significant knowledge and trade skills to be successful.”
Jonathan Miller, Director at 365ifa, said “We have seen a significant decline in property flipping but there are multiple reasons as to why this is the case. It’s not just about higher labour and materials costs. Housing is one of the most taxed assets in the UK. A combination of stamp duty at a higher level to purchase second property, income tax to be paid should you rent the property in the interim and the reduction in capital gains tax allowances on the disposal, has had a significant influence on activity levels in this market.”
Samuel Mather-Holgate, Independent Financial Advisor at Mather and Murray Financial, says “Property flipping is firmly on hold. Not only are raw materials costing the earth, but property prices are still punitively high in many areas of the country, and those needing work aren’t going for much of a discount. That said, with the cost of living biting, house prices will fall and the cost of borrowing should reduce at the same time.”
