London renovation properties for sale: seven things you need to know about buying a fixer-upper home

Buying a renovation property can pay off in the long-term if you’re realistic about the challenges ahead. Here are seven things to consider before you take on a fixer-upper home.
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Buying a fixer-upper home can be the perfect challenge for keen renovators and first-time buyers looking to put their own stamp on a property.

Although certainly not for the faint-hearted, for buyers who plan to live in it while doing it up, this type of project can be a good way to get on – or climb – the property ladder, cut stamp duty costs and eventually add value to their home.

“Fixer-upper homes appeal to people because they can put their own personality on the property,” says Stephen Ludlow, Chairman of estate agent Ludlowthompson who are marketing a four-bedroom terrace house in need of renovation near Finsbury Park Tube station.

“We see people modernise a house to the nth degree, in a bid to maximise the asking price, but sometimes people would prefer to change it themselves,” Ludlow adds.

And once works are finished on the property, if it has been your principal home throughout, any profit is free from tax when the time comes to sell.

“We’re seeing a shift in terms of these types of properties becoming attractive to those who were first-time buyers two or three years ago,” says Ludlow, “Perhaps their first flat or home has increased in value, they may have a slightly larger deposit now, and they want to move on to a property they can put their own stamp on.”

“It’s an opportunity to take one further step up the ladder to a bigger home.”

A two-bedroom home near Blackhorse Road Station in Walthamstow is for sale for £425,000

Seven things to consider before buying a fixer-upper home

1. Do your market research

It pays to look at similar projects in the area, whether extensions have been permitted, and how much they have been listed for post-renovation.

“Research is especially important if you’re planning on selling the property once the project is complete to make sure you have realistic expectations of what it might be eventually worth,” says Bradley Suter, head of Savills Hackney.

So do your homework, and be prepared to act quickly.

Ed Bloom of Hamptons International West Hampstead warns that the best renovation opportunities tend to generate significant interest: “The difficulty that most buyers face when looking for a fixer-upper is actually sourcing the property,” he says, “When a property does come to market we find ourselves inundated with enquiries.”

2. Be open to exciting locations

Location is key but be flexible.

“Buying a doer-upper may open up addresses you may not have otherwise been able to afford,” says Suter, “You could find yourself able to live in an address that once felt aspirational.”

3. Budget, budget, budget

Determine, as exactly as you can, how much the work you want to do is going to set you back.

Some builders will give free quotes, but bear in mind that these tend to be minus VAT - which will add another 20 per cent to the bill.

“One of the main common mistakes made by buyers is that they let the excitement side of the purchase take the lead without taking the financial side into account,” says Bloom.

A three-bedroom semi-detached home in West Ewell is for sale for £350,000

4. Be prepared for it to take longer, and cost more

Have a contingency budget, and always allow yourself between five and 10 per cent extra for both project duration and cost.

5. Think outside the box

Conventional mortgage lending can be more difficult for these types of homes, and you may need a larger deposit.

“You might need to use a different sort of lender, depending on how big the project is, for the first few years, then once finished you can switch to a more conventional mortgage,” says Ludlow.

6. Have a survey done

Once you’ve found the renovation project you’ve been looking for, but before you set your heart on it, have a survey done.

“Get a measured survey of the property done as an empty house, see the space you’ve got and design to that space – rather than being prescriptive,” says Ludlow.

7. Call in the experts

Be aware that you can’t necessarily totally reconfigure a leasehold, or share of leasehold, home.

Unless you buy a project home with the freehold, you’re going to have to check with the freeholder before starting any works.

Make sure you know what you can and can’t do to the property, and the same advice goes for any building restrictions in place in the area.

“Whilst it’s very easy to get excited by a project, my advice would be to always have a trusted architect and builder in mind who can view and advise prior to making an offer,” says Bloom.

Whether you’re looking to get a foothold on the property ladder, or looking to move up a couple of rungs, a project home could be the answer – but experts are unanimous in advising you to go in with your eyes open to both the challenges and opportunities ahead.

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