Insight 24 | INovate and Renovate
While other estate agents are doing the hokey cokey and debating being in or out, I am firmly INnovating and renovating. Our savvy clients are calling us to ask if we have a fixer-upper project. This could be the moment to grab a property that has the potential for appreciation — whatever the outlook for prices.
Church House is the perfect opportunity to create a home that suits your needs and those of your family, and pay less for it. The comparison site Confused.com found that renovators are paying less for properties and reaping the rewards. During this period of uncertainty, sellers are becoming impatient so motivated sellers may be prepared to take a lower offer. This may include properties that are in need of refurbishment.
Here’s how to make your renovation project work.
Find a property | You will see from the property portals or by talking to us which properties are in need of renovation. Zoopla will give you an idea of local values, but don’t take it as gospel because renovation projects tend to price themselves. You must take into account obvious issues such as dry rot or structural problems, as well as the actual renovating costs.
Don’t forget stamp duty, legal fees, mortgage valuation fees (ask if this can be combined with a structural survey because it may save you hundreds), and professional fees for architects and structural engineers.
Secure the property | If you can see the potential in a keenly priced renovation property, other buyers will too. It’s not uncommon for proceedings to go quickly to best and final offers or sealed bids. This can be unnerving. Focus on the property and not on beating other bidders if you want to avoid overspending. Make sure you have your finances in place, with proof of cash funds or a loan offer in principle agreed, with all the credit checks, and so on, already done by your lender.
Set a renovation budget | A careful budget is key if you don’t want to run out of cash before the job is finished — more than a quarter of renovators told Confused.com that they overspent.
Michael Holmes, a spokesperson for the National Homebuilding & Renovating Show, says that a contingency fund of 15 per cent is realistic. The key to an accurate budget is nailing down decisions on design, fixtures and fittings. This information allows you to get quotes for all labour and materials. Use a trade estimator such as whatprice.co.uk to gauge figures for common jobs, such as plastering and painting. For a large project, hire a quantity surveyor.
Have a survey done | You have to drop the idea that it’s down to the seller or surveyor to tell you everything. It’s not, it’s down to you. As well as a very good surveyor and a full structural survey, I spend money on gas and electrical checks and drain checks before I buy. Your first port of call is the Royal Institution of Chartered Surveyors. It’s not necessarily ‘one thing’, it’s the ten problems you didn’t know about at £2,000 to £3,000 each that add up and take away the money you were hoping to spend on a kitchen,
Pre-empt hidden costs | Most renovators would advise living elsewhere until the first fix stage of plumbing, electrics, structural work, etc, so factor in accommodation. Other costs include reconnection and ongoing fees for water, electricity and gas; relocating meters; council tax from the point of purchase, even if you aren’t living in it; skips; and services such as tree removal.
Make use of professionals If you’re saving money, it might seem counterproductive to employ tradesmen, but don’t overestimate yourself. While getting involved on a DIY basis can save thousands in labour and reduce project costs by 40 to 50 per cent, it will inevitably take much longer. It is essential to use a professional for gas and electrics. If these elements of a job are undertaken by a non-professional, it can result in serious injury or even death. To ensure full building regulation compliance, certification is required.
Seek legal cover | Check whether previous owners have applied for planning permission for anything and whether this was granted or has lapsed. Then check what neighbouring properties have been granted or are in the process of being granted — this could stand you in good stead. Some renovation veterans swear by having a pre-planning consultation with the planning department of your local council before starting on your plans.
Maximise space | Where to start with the renovations? A typical first-timer will start in the kitchen and, with it being summer, will probably think about adding bifold doors into the garden. Don’t. The first thing you should do is make the house watertight. Attend to the roof, drains, windows and anywhere that rain and wind can gain ingress. If you don’t, once winter hits, damp, crumbling plaster or a flooded cellar could be the outcome. Architects also advise against the approach of doing a room at a time. Focus on the property as a whole. Look at the rooms that need to be included, and the circulation into, through and around them.
Add value | Confused.com found that only 19 per cent of renovators made a profit — averaging between £25,000 and £50,000. This suggests that most underestimate the ratio between the cost and end value or are not in it for the money. Clever improvers preserve original features and enhance the quality of the living areas.
Adding space such as a loft extension can increase the value of a house by 21 per cent, according to Legal & General, the insurer, while an extra bedroom is guaranteed to bring a good return.
For mid-market properties, add-ons such as a wet room or a cinema room won’t return the outlay. A quality renovation will always pay dividends.