If you’re thinking about flipping properties in the UK — buying a house, renovating it, and then selling it for a profit — you'll almost certainly come across the so-called “70% rule” (also sometimes written as the “70 per cent rule”). In this blog I’ll explain what it is, how it works (with UK-relevant examples), why people use it, and importantly what its limitations are (especially in the UK market).
At its most basic, the 70% rule is a guideline investors use to avoid over-paying for a property they intend to renovate and flip. The idea is to leave enough margin to cover renovation costs, holding costs, unexpected issues and still leave a profit.
Here’s how it works:
Example (UK-style):
Suppose you find a house you believe you can sell for £200,000 after renovation (ARV = £200k). You estimate the repairs/refurb cost £30,000.
While the 70% rule is a useful guideline, it has several important limitations — especially in the UK property context.
Your estimate of what the property will sell for after renovation may be overly optimistic. You must base ARV on recent comparable sales of fully renovated properties in the same area. If you get that wrong, your margin vanishes. Strategic Passive Investments+1
Unexpected structural issues, delays, higher labour/materials costs, regulatory or planning issues can all push repair costs up. If you plug in an estimate that proves too low — your actual cost eats into profit. New Silver+1
The 70% rule formula typically considers ARV and repair costs — but many other costs come into flipping: financing/interest, holding costs (utilities, insurance, taxes while you own the property), transactional and legal fees, marketing/agent fees when reselling. If you ignore these, the margin shrinks. Real Equity Acquisitions+1
Especially in high-value areas (London, South East) or where competition is fierce or market is rising/falling, the rule may need adjustment. Some investors say you might accept a higher “purchase price relative to ARV” in very hot markets when you’re confident. CapSource+1
In the UK you also have to factor in: stamp duty, VAT, building regulation/conservation restrictions, market liquidity in specific regions — all of which may impact the flip profitability. The rule is a guideline but must be adapted locally. Evolve Finance+1
Short answer: yes — as a starting point — but with caution. In the current UK market, many experienced flippers argue that deals meeting the strict 70% rule are harder to find. Some may have to accept higher purchase cost relative to ARV if they have strong local knowledge, fast turnaround, low holding cost, or are in a growth region.
For example, Planet Property Blog says of the UK:
“The 70% rule is a guideline … The UK property market is diverse … the rule should be considered a general rule of thumb rather than a strict formula.” Planet Property - Planet Property Blog
In other words: the principle holds, but real-life circumstances may force you to flex or refine it.
The 70% rule offers a useful framework for flipping properties in the UK. It helps investors avoid over-paying and ensures a margin for costs and profit. But it is not a guarantee of success. Market conditions, accurate estimates, cost overruns and local idiosyncrasies all impact the eventual outcome.
So: Use the rule as a starting point, then dive into the detailed numbers and localities. If you do, you’ll be in a much better position to decide whether a particular property is worth flipping
