Due to soaring renovation costs, inflation and supply chain disruption have sent building material and labour costs sky-high.
Higher interest rates have also pushed up prices, making traditional buy-to-sell mortgages more expensive and demanding more careful financial planning.
In Q1 of 2025, just 2.3% of homes sold became flipped, the lowest point since 2013, which reflects people’s reluctance.
With tighter margins, the average percentage margin dropped to 10% in 2025, from 17% a decade ago, success now depends on choosing the right property in the right postcode, where there is strong buyer demand and a willingness to pay a premium for a renovated home.
Rethinking Property Flipping
Flipping can still deliver rapid profits, but those returns are now far from guaranteed and depend heavily on timing, execution, and market conditions.
In fact, 2025 figures show that out of 80% of properties that were flipped and sold for more than it was bought from, just 66% of these made a profit after paying stamp duty.
Holding and renting a property after refurbishment can provide long-term capital growth and a steady income stream, especially if a quick sale at the desired price isn’t realistic.
It could also be smart to adopt a hybrid strategy – buying a fixer-upper, adding value through renovation, renting it out while the market stabilises, and selling later for a stronger return.
Setting Yourself Up For a Successful Flip
Before diving into your first, or next flip, it’s vital to understand the risks and realities involved.
It’s important to be aware of the financial risks and unpredictable market fluctuations. Even a well-renovated property in a prime location can struggle to sell if the market dips or buyers retreat.
Alongside this, you must also ensure that properties in conservation areas or with listed status can have strict limits on what changes you can make. Always check planning permissions and building regulations first.
Overall, it goes without warning that flipping is rarely quick or easy.
Coordinating renovations, managing contractors, and hitting timelines can feel like a full-time job. Make sure you are well aware of the time and financial commitment you are making.
5 Key Things To Keep In Mind Before A Flip
Research the local market
The most profitable flips aren’t just about the property, they’re about location and timing. Know what properties are really selling for and where demand is strong.
Understanding local demand and realistic resale values is the foundation of any successful project.
Budget for all costs
Go beyond just materials and trades; include financing, fees, surveys, and a contingency fund.
Hidden costs are where many first-time flippers get caught out, so building a comprehensive budget upfront means fewer nasty surprises later.
Line up your financing
Explore bridging loans, private lending, or specialist buy-to-sell mortgages before you commit. Speed and flexibility can make or break a flip, and having the right finance lined up early keeps your project moving and strengthens your negotiating position.
Fast access to bridging finance or short-term development loans can help you move quickly on opportunities – or cover refurb costs while waiting for a sale. Flexibility is key in a market where timing makes all the difference.
Get proper surveys and permissions
Avoid costly delays by ensuring the property is structurally sound and that you can legally carry out your planned works.
A thorough survey and the right permissions can save you thousands and help turn unknown risks into manageable challenges.
Plan your exit strategy
A clear exit plan shapes every decision you make. Decide from the start whether you’ll sell, refinance, or rent, and how you’ll repay any borrowing.
It’s the difference between a project that drifts and one that delivers.
James Caldwell is director of Clifton Private Finance
