The once popular property investment phenomenon of ‘apartment flipping’ has ground to a halt in London, it has been claimed.
Tim Hassell (pictured, above) of leading London estate agency Draker says higher Stamp Duty, a growing reputation for ‘nefarious’ pricing tactics and also developers getting wise to the phenomenal profits made by some professional flippers, have brought about its demise.
Hassell also says the newbuild market is ‘in trouble’ in London because so many developments have come on stream recently that the market is now flooded with stock.
He says too many blocks have gone up too quickly and now a lot of them have been mothballed as developers have battened down the hatches.
“When you’re starting to see offers, which I’m starting to see now, that include Stamp Duty and moving costs paid, then you known that the market is beginning to backslide,” he says.
In October last year developer Almacantar stood down Knight Frank and CBRE at its redevelopment of the Centre Point building, blaming Brexit and higher taxes for buy-to-let investors, although the scheme has recently been revived.
“Stamp Duty is the big paralyser of the sales market – people think it’s Brexit but it’s not,” says Hassell, who claims this paralysis in the sales market is benefiting his business, which only deals in lettings.
“At the moment there is no reason from any angle why a landlord would sell their investment property during a down sales market and when it’s incredibly cheap to hold the investment because interest rates are so low,” he says.
“This is compounded by the fact that since the credit crunch few people have sold their buy to let properties and a huge number of people over the past decade have been investing.”
He also says this has broken the natural five or seven-year buy-to-let investment cycle that has typified the London market since the late 1990s.