Buying at a low price and selling high is a staple investment strategy, but while London once led the way for property speculation, it’s now being significantly surpassed by the north.
New statistics have emerged showing that the trends of property speculators and “flippers” – who purchase properties and sell them on at a higher price, sometimes after renovation to up the value – have seen a major shift in recent times as the country’s housing market has rebalanced regionally.
London’s property market has experienced huge growth over the past couple of decades, which has made it the perfect place for property investors to make good money from capital appreciation. However, with the slump seen in the capital’s house prices over the last couple of years, those looking for the perfect “flipping” destination have been seeking better markets elsewhere.
Moving north to grow profits
According to Hamptons International, which looked at data from the Land Registry showing properties that were bought and then quickly sold again, Burnley in Lancashire had the highest rate at 6% of all homes sold over the past year. This was followed by Middlesbrough, Redcar and Cleveland and County Durham – all in the north, which is where 11 of the 14 top flipping locations were found.
This is a reverse of the situation seen three years earlier when the likes of Kensington and Chelsea was one of the top places for flipping property, according to the statistics.
Affordability pressures affect the market
While the number of people using this investment strategy may have decreased in recent years across the UK as a whole, as house price growth has slowed slightly and issues such as Brexit uncertainty and the stamp duty surcharge for second homes have come into play, it is still possible to turn a profit through flipping – particularly in northern towns and cities.
Aneisha Beveridge, research analyst at Hamptons, commented: “Some northern areas are more resilient. Lower property prices mean that some of the homes bought by flippers fall under the £125,000 stamp duty threshold.
“Price growth in the north will continue to outpace prices in the south, as these are the areas worst affected by affordability pressures.”