Are 'Flips' viable in 2026, and beyond?
As Estate Agents, we often find that these days, it's often the best house in the street that takes the longest to sell.
In 2026, the gap between the purchase price and the price you can achieve post-renovation is the narrowest it has possibly ever been. Let's examine some of the key considerations you should make when flipping houses:
Consider a larger property
Typically, the larger the property, the larger the gap between the price you pay and the price you can achieve. This will give you a wider margin to work with.
Additionally, at the lower end of the market, there can often be lots of investors who will view a proeprty in need of work as a good opportunity. This can often mean getting into a bidding war, increasing the cost
Stamp duty
If the property that you're buying is in addition to your main residence, there will be an elevated rate of stamp duty to pay as the property will in theory be a 'second home'. Try looking for projects that can be occupied during the work, as the stamp duty is lower for a main residence.
Short-term borrowing costs
Short-term/bridging finance will always come at a premium. Projects that can be purchased with cash will reduce the coverall cost, and widen the profit margin.
High costs of vacancy periods
With utility standing charges rising every year, and more and more Council areas charging increased Council Tax for vacant properties, it's important to factors these costs into your estimates.
Costs of Labour and materials
As with everything, time is money. The cost of contractors is likely going to be one of your biggest costs, depending on the size of the project. Having the ability to carry out much of the work yourself can be a really easy way to cut down the cost.
The cost of materials has also seen a big rise over recent years. One of the biggest mistakes we see investors make is to overspend here. It's important to remember that a high-end finish will increase desirability, but not necessarily the monetary value at completion.
Choose a target market
Thinking about your ideal buyer before choosing the proeprty can be a really easy way to filter out opportunities that might not be suitable. For example, properties at the lower end of the market (such as a 2-bedroom terrace in Hull) are usually purchased by first-time buyers and investors. These two key demographics often have a lower ceiling capping the price they're willing to pay.
To summarise, flips seem to be a more viable option at the higher end of the market, where gap between the price you agree, and the potential asking price are the widest.
Here are our 5 top tips before considering a flip.
1) Who is the house likely to be purchased by? Consider the level of finish and the price they would expect to pay first.
2) Go big or go home. The margins are larger the bigger the property (and the bigger the project).
3) Consider a project that can be your main residence, as the stamp duty will be less.
4) Carry out the work yourself, as contractors remain one of the largest costs.
5) Don't forget to include vacant property costs (Such as buildings insurance, Utilities, and Council Tax) in your figures.
If you would like us to consult on works in advance of a purchase, and advise on the most cost-effective ways to boost the value, the Wigwam Team are happy to help. Contact us: 01482 50 51 52