Is this the end of property flipping?

Hi there,

This is Chubby Wallet. The newsletter that teaches you how to profit from property trends before they go mainstream..

Here's what’s in store..

• General market update

• Renters rights bill clears house of lords

• Why property flipping isn’t profitable anymore

• From $15M in debt to a $B empire in 10 years

While the real estate headlines are about the biggest price drops in 20 years, the reality under the surface tells a different story.

Yes, there's more price cuts and lower asking prices, but transaction volumes remain robust..

Let's dive into what's really happening out there...#

The latest data

According to Chris Watkin's Week 28 data, new listings hit 34.3k (down from 35.9k the previous week) but still running 13.6% ahead of the 9-year average. 

Translation?

We're still in "more stock than normal" territory, though the momentum is cooling.

Price reductions are the real story here:

• 25,600 price cuts in June (14% of all listings vs. the 5-year average of 10.6%).

• Sales momentum remains healthy with 26.3k homes going under offer—up 7.6% year-on-year.

• June ended with with 758k homes on the market (compared to ~600k in a seller's market).

The pricing picture

Rightmove's monthly House Price Index delivered the headline-grabbing news: asking prices dropped 1.2% month-on-month—the largest fall in over 20 years of their data.

London led the losers (down 1.5%, with Inner London down 2.1%), while the North East actually saw prices rise 1.2%.

The lending landscape

UK Finance's Q1 2025 BTL report shows a lending "resurgence"—loans up 38.6% in number and 46.8% by value versus Q1 2024.

But context matters: we're still below 2019 levels, let alone the 2022 peak.

Average BTL yield sits at 6.94% with interest cover ratios at 202%. Arrears continue falling while repossessions tick up slightly

The rental markets

According to Hamptons International, rental growth forecasts were revised from 4.5% to 1% for 2025. 

New let rents up just 2% to December 2024, with London down 2.5% and rental stock down 34% from 2019 levels.

The culprit?

Record 33% of sales going to first-time buyers, reducing tenant demand by 11%.

The bottom line is :

Your action plan

• For buyers: This is your moment. With thousands of price reductions, focus on areas outside London's premium zones where fundamentals remain strong.

• For Investors: BTL fundamentals look solid with 6.94% yields and improving lending conditions. But forget flipping—SDLT has killed those margins. Focus on long-term rental yield plays…

The Renters' rights bill cleared the House of Lords on July 21st after six months of scrutiny.

Royal Assent expected September 2025, with implementation likely Q2 2026.

Bottom line: Despite 300+ proposed amendments, only four meaningful changes survived below

Pet deposits: narrow win

• What changed: Baron de Clifford's amendment allows pet deposits up to 3 weeks' rent (passed 206-198).

• Why it matters: Government scrapped pet damage insurance, claiming no products exist. Without deposits, landlords will build pet risk into base rents for all tenants.

Sale ground: modest relief

• What changed: Ground 1A (the legal reason allowing landlords to evict tenants when they want to sell) now has a shorter "cooling off" period—reduced from 12 to 6 months before you can re-let (passed 213-209).

• Translation: If you evict tenants to sell but the sale falls through, you must wait 6 months (not 12) before getting new tenants.

• Action required: Plan for 12-month restrictions to remain.

Student properties: expanded access

• What changed: Ground 4A (the summer eviction rule for student properties) extended to all student lettings, not just HMOs (houses in multiple occupation—shared houses with 3+ unrelated tenants) (passed 221-196).

• Translation: All student landlords can now serve eviction notices between June-September to get properties back for the next academic year.

• Impact: Previously only shared student houses qualified—now includes single student flats too.

Enforcement: higher bar

• What changed: When councils want to fine landlords for illegal practices (like refusing families with children or accepting rent bids above advertised prices), they now need "beyond reasonable doubt" proof—the same standard used in criminal courts.

• Previous standard: "Balance of probabilities" (more likely than not—easier to prove)

• Impact: Much harder for councils to impose fines, as they need virtually bulletproof evidence.

Timeline Sept 8: (MPs and Lords bounce amendments back and forth until they agree)

Sept 2025: Royal Assent (bill becomes law)

Q2 2026: Implementation begins (est.)

Your action plan

• Review tenancy agreements for pet clauses and pricing 

• Update sale strategies assuming 12-month restrictions remain

• Prepare student property procedures for potential summer eviction rights

• Budget for compliance costs and administrative changes

The reality: Section 21 (no-fault evictions), fixed-term tenancies, and blanket pet bans are ending regardless.

These amendments are minor tweaks, not major reversals.

House flipping — once the domain of savvy investors chasing quick wins — has hit an 11-year low.

According to Hamptons, just 7,301 homes were flipped in Q1 2025, 27% below the 10-year average.

Why?

Because flipping no longer makes financial sense in most parts of the country.

In 2022, the average gross profit was £38,000.

Today?

£22,000 — a 42% collapse. Factor in the SDLT squeeze, and net profit drops to £12,000, or just 7% of the purchase price. Not worth the risk for most.

Basically Stamp Duty alone now eats up 30% of gross profit, a staggering jump from 7% in 2015.

More expensive homes, less return

Many investors assume higher-priced homes yield higher profits.

But Hamptons data proves otherwise — flips under £40,000 had an 87% success rate, compared to just 66% across the board.

North is the new south

Historically, the South was flipping ground zero.

Not anymore. Today, 61% of flips are in the Midlands, North, or Wales, up from 50% a decade ago.

The North East leads, with 4.7% of all homes sold in Q1 2025 flipped — more than double the national average.

Zooming out..

• 2013–2022: Rapid price growth

• 2023–2025: SDLT changes + higher costs + flat growth = flipping fatigue.

The lesson?

Flipping thrives on inflation. Without it, the model crumbles — unless you operate in micro-markets with extreme affordability.

It’s time to rethink the playbook.. If you’re still evaluating deals based on 2021-style capital uplift, you’re already underwater.

The new model

• Focus on lower value, high-velocity assets

• Pursue light reconfigs over full refurbs

• Consider lease options or assisted sales to reduce upfront SDLT exposure

Final Word

Hamptons’ report makes one thing clear — we’ve entered a margin-conscious market.

Quick wins are gone... smart, location-specific strategies are the future.

Sanjiv Chopra had a plan:

law school, a prestigious career, and stability. But life had other ideas. After getting bored from working on legal cases, he decided to jump into real estate now..

With nothing but a broker’s license and a tiny office, he hustled—cold-calling, knocking on doors, and closing deals.

His first big break?

Convincing a landlord to let him sell their building if he leased space from them. That $60K commission was the spark.

Soon, he was brokering deals for major retailers like Jack in the Box and AutoZone, stacking millions.

Then, disaster struck.

The $15M bet that almost broke him

Sanjiv was riding high—until a trusted client (a Jack in the Box franchisee) left him holding the bag on $15 million in debt.

Overnight, he went from counting future millions to staring down financial ruin.

Most would’ve declared bankruptcy. Not Sanjiv.

Instead, he made a promise: "I’ll pay back every cent."

The comeback

With no options left, he stumbled into an unlikely lifeline—a struggling gym. The owner offered a deal: "Pay me over time."

There was just one problem—Sanjiv didn’t have the cash.

So his wife did the unthinkable: She pawned her wedding ring for the down payment.

Within a year, they turned the gym profitable. Then they opened a second. Then a third.

The empire builder

By 2015, Sanjiv had built 82 gyms—one of California’s largest private fitness chains. But real estate still called.

Using creative deal structures (like "double escrows" where he bought and sold properties the same day without touching cash), he scaled fast.

He targeted undervalued retail centers, renegotiated leases, and partnered with national tenants like Harbor Freight Tools.

His strategy? Buy right, add value, repeat.

Today, his portfolio is worth $1.5 billion—all built in a decade, with no outside investors.

His approach:

• When banks wouldn’t lend, Sanjiv turned to private lenders

• Master the Art of the Deal – creative structuring beats brute-force capital.

• Relationships > Short-Term Wins – He prioritized long-term trust—leading to future deals with the same players.

• Be where you are – Whether in the gym at midnight or at home with his kids, presence is the ultimate competitive edge.

The takeaway

The difference between failure and fortune isn’t luck—it’s how hard you’re willing to fight when the world says you’re done.

That's it for this week folks. Each week we'll cover strategies, updates and insights to help you succeed in real estate. We love this stuff!

If you Have questions or just want to chat, We want to hear it.

See you next time in your inbox!

What did you think of this Newsletter?

🤜🤛 Loving Chubby Wallet? Make our day and forward this to a friend.