PropertyScout guides
How to analyse a flip deal in the UK
A flip only deserves serious attention when the exit view is believable, the works view is grounded, and the margin still looks sensible once buying, holding, and selling costs are stated plainly.
Worked example · illustrative figures
A £70,000 price spread is not a £70,000 profit
Illustrative project totals before tax. Buying, holding and selling figures are assumptions that need property-specific quotes.
| Item | Example | Basis / comparison |
|---|---|---|
| Purchase | £180,000 | Entry assumption |
| Works | £30,000 | Including the assumed works scope |
| Buying costs | £12,000 | Fees and transaction-tax allowance |
| Finance and holding | £8,000 | Project-duration assumption |
| Selling costs | £5,000 | Agent and legal allowance |
| Total cost | £235,000 | Before profit tax |
| Sale / net profit before tax | £250,000 / £15,000 | Not the £70,000 price spread |
| Sale 5% lower | £237,500 / £2,500 | Same cost assumptions |
The base margin leaves only £2,500 if the exit price falls 5%, before any additional delay or overspend.
Explore the flip numbersFurther reading: GOV.UK: checking sold prices. Checked 7 September 2026.
The sale price should be defended before the rest of the story gets loud
Most weak flip reads start by assuming the exit will be there because the area sounds strong. The stronger route is to treat the sale number like a pricing input that needs sold evidence, condition logic, and timing realism.
- Tie the exit to sold comparables that actually match the end-state ambition.
- Separate current-condition value from post-works value so the uplift stays honest.
- Soften the recommendation quickly if the exit still depends on broad market hope.
Profit after works is useful, but it is not the final answer
It is normal to think in terms of purchase plus refurb against the exit. But the cleaner read keeps profit after works separate from the eventual net result so the margin does not get overstated.
- Track gross spread, profit after works, and net profit as distinct layers.
- Treat the refurb budget as provisional until the scope has enough texture to trust.
- Use a flip calculator early so the drag is visible before momentum builds around the deal.
A lot of poor flips sound fine until the margin is translated from before-fees language into actual net cash language.
Buying costs, holding costs, and selling friction change weak flips dramatically
A slim flip can disappear once the carrying period stretches or the selling costs bite harder than expected. That does not mean flips are bad. It means time and friction have to be loaded early.
- Use a monthly holding figure even if the project feels short and tidy.
- Keep selling costs visible enough that the net result is easy to defend.
- Watch for flips where the break-even exit starts sitting too close to the target sale price.
A serious flip memo ends with a price view and a next move
The final read should show what supports the flip, what still limits the confidence, and what has to happen next before the deal deserves serious time or a serious offer.
- Keep the recommendation soft if the exit and works case are still thin.
- Make the next step operational: tighten sold evidence, quote the works, or hold the case back.
- Use a Deal Pack when the flip needs to be forwarded to someone else without rewrites.
What usually breaks a flip on paper?
Over-trusting the exit, under-stating the refurb drag, and ignoring the carrying and selling costs that sit between a hopeful gross spread and a real net profit.
Should I ever look at flip profit before costs?
Yes, but only as an early layer. The real decision should move quickly from gross spread into profit after works and then into true net profit once the drag is stated.
When is a flip ready to be taken seriously?
When the exit has sold support, the works view has enough discipline, and the net margin still looks worth the effort after all the real drag is loaded in.
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