Are property 'speculators' returning to the British property market?

Are property 'speculators' returning to the British property market? [Photo: iStock/andresr]

For some time now, property investors in the UK, be they domestic or overseas, have been putting their focus on the private rented sector. Thanks to the increased demand from tenants and the growing yields it has to offer, the rental market has become one of the most mainstream assets around. 

However, over the past few months, an older trend in UK property has apparently been emerging once again, as an increasing number of short-term owners start to surface in the sector, gaining prominence once more. 

Property speculating is a term that is also known as flipping, where people buy homes and then sell them again in a short period of time to maximise profits and make the most of quickly rising house prices. And according to a report in the Financial Times, it's a practice that is once again becoming more common across the UK. 

According to Countrywide data, it said, more than 30,000 flats and homes across the UK, with a value of more than £5.5 billion, were sold more than once in the past year to the end of April. It said that when this happens, it's a sign that someone has flipped the property. Countrywide believes that in the past 12 months, the practice of speculating on properties has hit its highest levels for more than a decade in the UK. 

Although it still has a long way to go to hit the highs of 2007, when just under £10 billion worth of homes were flipped across the country, the UK has seen a return to a practice that seemed to have been on its way out over the past few years. 

However, activity in this sector has also started to shift away from London, with the data showing that in the past few years, it has been those in the north who have flipped homes more often. Only two of the top ten regions in the country for the practice are in the capital, with the north-west and Yorkshire having become the best place, it would appear, to indulge instead. 

“There has been a big shift away from London and towards places where prices are growing a bit more. It is a story about where people think prices will grow,” said Johnny Morris, research director at Countrywide. 

“It’s about the recovery in the housing market outside the south of England — the market in the Midlands and north has picked up in the last 18 months or so, making this more attractive and more financially viable for people to do.”

Leeds and Manchester have both passed London in the past few months when it comes to flipping activity, while Barnsley and a few places in the south, such as Reading, have also become more popular places to flip properties in the last few years.