Flipping property: Where should you invest?

When identifying areas for property investment, you may first turn your eyes to London. Although not necessarily a bad area for investment, the North is seeing significant economic growth, surpassing even London.

New statistics highlight that property buyers flipping property, those who buy low, renovate, and sell higher, are shifting their purchases in recent times. Where London used to be the go-to city for this, many are moving North due to a major shift in the countries housing market.

flipping property

London’s property market for decades has been experiencing high growth, making it the best place to make a return on your property investments. However, with a relative slump seen in the capitals house prices over the last few years, investors have started looking elsewhere.

A shift to the North

When reviewing information found from Hamptons international, whom themselves analysed data from the Land Registry, we see that properties purchased and sold quickly again, or flipped, were at their highest rates in Burnley, Middlesbrough and Durham. All of these areas are in the North, with the North accounting for 11 of the 14 top destinations for flipping property.

When compared to what we have seen in years gone by, particularly looking at 3 years ago where Kensington and Chelsea were leading this trend, we see the effects of this significant shift.

This is largely due to the effect of ‘northshoring’. Northshoring is the increase in inward migration in developing cities such as Liverpool and Manchester due to an increase in jobs available. Over 7,000 jobs have become available due to tech and future thinking manufacturing projects. The result of this is an increase in property demand, particularly for HMO properties. For further information about what a HMO stands for, check out the ultimate guide on FJP investments website.

Price plays a part

With the uncertainty surrounding Brexit and regulations regarding the stamp duty surcharge for second homes coming into play, there has been a decline in this investment strategy. However, it is still possible to return a profit, particularly when identifying high growth cities in the north.

Research analyst at Hamptons, Aneisha Beveridge, says: “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. Aneisha goes on to say, “price growth in the north will continue to outpace prices in the south, as these are the areas worst affected by affordability pressures.”

So, we see that the reduced price in the North for properties and the increase in demand is the reason that the North is where you should be identifying flipping property investments.