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Buying a property that needs renovation can be a smart choice for many reasons. Whether you’re looking to make a profit or want a home designed to your taste, a fixer-upper can save you the premium of purchasing a renovated home. However, it’s important to evaluate if the renovation costs are worth the investment and be aware of what to expect during the process.
Is buying a property renovation a good investment?
Estimate renovation costs
Like any property purchase, it’s crucial that you work out the value when buying a project house. This involves estimating renovation costs and considering the property’s current condition and layout. Although getting precise quotes can be challenging, you can certainly get a good idea of expenses for decorating, replacing carpets, fixing roofs, adding extensions or installing a new kitchen and bathroom.
Assess structural suitability
It’s also important to understand whether the structure of the property is sound, and how suitable it is for things like extensions. A comprehensive homebuyers survey, can identify any structural issues and recommend fixes. This can be particularly useful if you’re planning major changes like loft conversions or room layout alterations.
Balance costs and potential value
Houses needing renovation usually come with lower asking prices, but adding the renovation costs gives a clearer picture of your total spending. A property in a desirable location with high potential can see significant value increases through renovation.
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How much are conveyancing costs?
Use our online calculator to get a personalised quote for your conveyancing today.
Is a fixer-upper right for me?
Consider how much work needs to be done when deciding if a fixer-upper is right for you, including time, effort and money. If your budget’s tight for the area where you want to buy, it can be a good idea to put what you can into the bricks and mortar of a home, especially if you’re a first time buyer. A liveable property may give you time to save up for the renovations you want.
If that’s not viable, factor in mortgage payments and temporary housing costs while the work’s carried out. Rental costs can be high, while you’ll also need to agree a short-term contract if you start a new rental agreement. Also, doing the work yourself might prolong the time it takes to complete renovations and impact your personal and professional life. Therefore, be realistic about your skills and stick to non-specialised tasks, like stripping wallpaper and painting if needed.
How to choose the right tradespeople
Knowing where to start can be a tricky business, but hiring tradespeople you can trust is a key step. Using recommendations from friends or family can be very useful, while there are other sources you can use to learn more about previous work people have done. Hiring reputable tradespeople and a professional architect can help to guard against spiralling costs, although it’s always a smart idea to have some extra cash for unexpected expenses.
What are the hidden costs of a renovation?
Uncovering unexpected issues
More often than not, building projects never run like clockwork from start to finish: from discovering damp covered up by paint at a viewing to finding walls in a poor state hidden by wallpaper, you may end up with a range of hidden issues that need rectifying. This is especially the case when you start ripping out old fixtures and fittings, which can reveal things like damaged brickwork and rotten floor joists.
Challenges with older properties
Older houses can be more susceptible to these issues, so you’ll need to use specific renovation techniques that cost more money. You may find the electrics are outdated and need replacing, while subsidence issues can also drive up costs. On the other hand, you may discover that ripping up some old vinyl flooring reveals a beautiful set of original wooden floorboards underneath.
View our house viewing tips to try and get an idea of questions to ask and what to look out for that could add to the costs.
What survey should I get on a fixer upper?
To guard against any hidden costs, it’s vital that you carry out a comprehensive survey before buying a property that needs renovation. A basic RICS Condition Report will only highlight urgent issues, but extensive renovations need a more detailed survey, whereas a Level 2 survey should identify any structural problems like dampness but doesn’t explore beneath the surface. For significant renovations, especially in older properties, the most detailed survey is advisable.
Find out more about the different levels of home buyers surveys.
Do I need planning permission for renovations?
You don’t need planning permission for most internal renovations, with things such as loft and garage conversions, bathroom and kitchen renovations, new staircases and rewiring usually covered by permitted development regulations. These often also cover adding extensions within certain limits – which depend on what type of property you have. You can also build a garage, replace windows and doors, pave your driveway and put up gates and walls. There may be conditions or limitations attached, and you need to ensure you comply with party wall agreements (which relate to shared walls with neighbours), so it’s worth checking what you plan to do before commencing work.
If you don't get the required planning permission, when it comes to selling you may need to get indemnity insurance. Therefore, it's always best to double-check what permissions your renovations need beforehand.
Positives and negatives of buying a fixer upper
Before making your decision, it's essential to weigh the positives and negatives of buying a fixer-upper. Understanding these can help you determine if a renovation property aligns with your goals and resources.
Pros
Affordability. Fixer-uppers typically have lower asking prices compared to move-in-ready homes.
Increase in property value. Renovations can substantially increase a property's market value.
Personalisation. You can tailor the home to suit your needs and preferences.
Cost savings. Tackling projects yourself can reduce labour costs.
Cons
Unexpected costs. Hidden issues can arise, leading to higher expenses after work’s started.
Time and effort. Doing work yourself can be very demanding and requires time, energy and skills.
Financial challenges. It can be tougher to get a mortgage on a fixer-upper.
Stress. Managing a renovation project can be stressful, especially if unforeseen problems occur.
Whether you decide that buying a project house is for you, or you go for a property that’s ready to move into, you’ll need to go through the usual process of arranging a mortgage and instructing a solicitor to carry out the legal work on your behalf. For more information on how things work when buying a home, don’t miss our comprehensive conveyancing guide, which you can download as a PDF.
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