Buying a ‘doer-upper’ has long been a dream for many of us.
TV shows such as George Clarke’s The Restoration Man give the impression that restoring a wreck is more a labour of love than savvy investment.
But with the housing market in the doldrums, it’s now one of the few ways to make money from property.
Added value: With the housing market in the doldrums, restoration now one of the few ways to make money from property
Rightmove says asking prices are static and have hit their affordability ceiling. Meanwhile, the Royal Institution of Chartered Surveyors says market confidence is at its lowest since the Brexit vote 13 months ago, so fewer homes are on the market.
Therefore, doing up a property is one of the few ways to ensure you can get your dream home at an affordable cost, and even go on to sell at a profit.
There’s no shortage of choice, either.
Ben Horne, of Middleton Advisors, a buying agency, says the properties in worse condition don’t always look that bad from the outside.
‘Often inhabitants have been there for 20, 30 or 40 years and have only added a new carpet now and again,’ he says.
‘In that time we’ve moved from lots of small rooms to open-plan living and many more new trends — so there’s plenty to get stuck into.’
Now there’s help from a new website, upshoot.co.uk.
It’s still being tested, but its objective is to scour the web for homes listed online, picking out those with scope for anything from a simple loft conversion to a full renovation.
The site will ultimately offer estimates for the work and list local contractors, as well as giving a valuation on what the finished home may be worth.
It joins plenty of others aimed at the would-be first-time property renovation set, including renovateme.co.uk, houzz.co.uk and periodproperty.co.uk.
But don’t be fooled. Experts say renovations are not for the faint-hearted and can take months or even years.
If you’re up for it, here are seven rules for turning a wreck into des-res without making you bankrupt.
If you’re going to live in it yourself, the choice is easier, but if you’re renovating to sell immediately, do your homework.
‘Look at market towns and choose houses near good schools and stations.
This is where there’s demand from busy professionals who are working and want a finished house, ready to move into,’ says Tom Hudson, an agent at Middleton Advisors.
Conversion potential: This Victorian pile in Ilfracombe was once used as a nursing home, but could be converted into apartments or returned to a massive family mansion
Is your plan realistic?
When you have your eye on a property, instruct a structural surveyor, architect and quantity surveyor to look over your ideas.
They will require up to £2,000 initial fees, but will be able to tell you whether your plans are realistic, and may suggest alternatives that could save you money or make the finished home more valuable.
Keep an eye on that budget
If the house you’re buying is in such poor condition that it’s uninhabitable, you may not be able to get a mortgage, so must have the budget for the buying and renovation costs.
If your purchase is in better condition, but needs modernisation, the lender may keep some of the mortgage until you have completed part of the work.
‘The biggest problem is people forgetting that building costs can rise. They get too emotionally involved and end up throwing money at a problem,’ says Alex Newall, managing director of estate agency Barnes Private Office.
First check the council’s rules
‘If a buyer hasn’t researched with the council what can be done before they buy, they can find themselves with a much more complicated project than they anticipated,’ cautions Hugh Blake, of Carter Jonas.
It is wise to be wary when renovating listed buildings, as there are often restrictions on what sort of modernisation is possible.
They also typically require expensive materials, which help to recreate the original appearance.
Upgrade needed: Five-bedroom houses in Cheam typically fetch £1.5 million, but the selling agent admits this one needs ‘refurbishment throughout’. The back garden stretches to 150ft
Be cash-ready at auctions
Auction or estate agent? If the former, remember you usually must have funds to pay 10 per cent as soon as the hammer falls and then settle the amount.
‘Auctions sometimes offer bargains but competitive bidding can push up the cost,’ says Alex Newall.
Avoid cowboy workmen
You may know trusted local builders or use sites such as ratedpeople.com, myjobquote.co.uk, checka trade.com or plentific.com.
But however you find your plumbers, carpenters and bricklayers, make sure they’re listed on trustmark.org.uk.
Trustmark is not well known, but it’s a not-for-profit scheme endorsed by the Government and lists only those ‘approved’ for good trading practices, consumer service and competence.
Hire a manager for your project
If you have a full-time job or a family, this is money well spent.
The project manager deals with the contractors, orders materials, checks building regulations and planning consents are in order, and monitors the budget.
You can still get your hands dirty if you want, but first-time developers rarely have the skills and time to manage a full renovation.