Flipping makes a comeback

18th September 2015

The Sunday Times looks at how the practice of flipping has made a return in London. Jeremy McGivern, managing director of Mercury Homesearch, says flipping can be lucrative if you choose the right development. However, he warns that it’s essential to do your research, to make sure that the demand is there and that there are not too many other buyers with the same idea. "The big danger is that speculators target the same developments, then all try to flip at the same time," he says. "They may well discover that there is not the demand to allow them to do so. In many cases, these speculators could lose their deposit, as they are not capable of providing the funds to complete." The key to success is playing the long game, says Michael Goldmann, sales and marketing director at Regal Homes, who has seen buyers making substantial profits by flipping the firm's properties before completion. "Anyone buying with the intention of selling on should look for a property where the completion date is far enough in the future to cushion any effect that a minor slowdown in the market may have," he says. Ray Withers, chief executive of the investment firm Property Frontiers, feels the strategy is simply too high-risk: if you can't find a buyer before completion, you will have to find a way to pay for the property or lose your deposit. Even if you can buy it, you may be lumbered with an investment flat you don't want or need. "If you don't have the wherewithal and appetite to complete, this is not a risk worth taking," he says.

The Sunday Times, London Property, (13/09/2015)