Why Property Flips Are Fading — and Why HMOs Are the Smarter Investment in 2025

July 10, 2025

For years, flipping properties was the go-to strategy for quick gains in the UK housing market. But times have changed—and fast. In 2025, the once-popular flip is becoming less viable, as the numbers just don’t stack up like they used to. If you’re still clinging to the flipping model, it might be time to reconsider.

Flipping Hits a 12-Year Low

According to recent data, just 2.3% of UK property transactions in Q1 2025 were flips—a 12-year low. That statistic alone signals a dramatic shift in investor behaviour. But dig a little deeper, and it’s clear why this downturn is happening.

Shrinking Margins and Soaring Costs

Flipping properties used to be lucrative. In 2015, the average gross profit margin was 17%. Today, that number has dropped to just 10%. Meanwhile, average renovation costs now exceed £76,000, eating into already razor-thin profits.

One of the biggest culprits? Stamp duty. What once was a manageable expense is now a major financial drag, consuming nearly 30% of gross profits on a typical flip. This alone has made many deals unfeasible, especially in higher-value markets.

Less Than 7 in 10 Flips Are Profitable

As of 2025, only 66% of flips are still turning a profit. That means nearly a third of investors are losing money or breaking even, hardly the kind of odds seasoned investors are willing to gamble on. Additionally, deal volumes are now 30% below the 10-year average, further signalling a cooling trend in this once-hot segment.

Location Matters More Than Ever

If flipping still works anywhere, it’s in lower-cost regions such as the North and Midlands, where entry prices are lower and margins can still be found. But even in these areas, the effort, cost, and risk involved are increasingly hard to justify.

The Flip Side: Predictable Returns from HMOs

With flipping falling out of favour, smart investors are pivoting to long-term rental strategies, especially HMOs (Houses in Multiple Occupation). Why? Because HMOs offer more stable, predictable returns, often with higher yields than single lets or risky flips.

At Foot Forward, we specialise in sourcing and developing high-performing HMO investments that work in today’s market conditions. Unlike flipping, HMO investments benefit from:

  • Consistent monthly rental income

  • Multiple income streams from one property

  • Stronger cash flow and lower risk

  • Long-term capital appreciation

Flip the Model with Foot Forward

Let’s face it: flipping is no longer the fast-track to wealth it once was. With higher taxes, mounting renovation costs, and flatlining house price growth, the model is broken unless you’re operating in very specific, low-cost markets.

Foot Forward helps investors flip the script by shifting from short-term gambles to long-term, sustainable wealth-building strategies through HMOs.

Looking for a smarter property investment in 2025? It’s time to move forward—with Foot Forward.

Ready to ditch the flip and build lasting income?
Contact Foot Forward today to learn how our HMO investment opportunities can transform your portfolio.