Assessing a House’s Renovation Potential

 

Buying a fixer-upper is an attractive and popular project for those looking to make their stamp on a house and achieve great value for money.

Get it right, and it’s a fantastic way to invest your cash. Not only will you be creating a space that’s tailored to your needs, you’ll also reap the rewards in terms of the property’s end value.

Get it wrong, and it has the potential to turn into a disaster akin to a never-ending soap opera, guzzling up your finances with no hint or hope of a profit at the end.

Over the upcoming issues of Build It, I’ll be investigating what it takes to ensure your renovation works result in a wonderful home that you can enjoy for years to come.

The first step, of course, is having a house to renovate.

Finding a renovation project

A quick look on the online property search engines will show you that there are plenty of buildings out there for sale. But sifting through and determining what has the potential to be transformed into your ideal home requires you to first establish some fundamentals.

Think about where you want to live – not only in terms of the geographical location, but also regarding what amenities your perfect future dwelling has access to (ie good schools, transport links, a decent pub etc).

To what extent would you be willing to sacrifice your dream location for the right house? How much do you want to spend in total (both on the purchase itself and the works needed) and how much of a project are you happy to take on?

Something key to bear in mind is that a house with renovation potential in a sought-after area is likely to come in at a premium cost because it’ll be in high demand.On the other hand, doing up a property that’s in an undesirable part of town may not yield a big return once renovated, regardless of how much money and wow factor you pump into it.

Fundamentally, it’s about weighing up your budget and local sale prices with what you’re hoping to achieve.

Online property portals are a great resource for finding an opportunity, but make use of all routes to enhance your chance of success.

Register with local estate agents, investigate property auctions and don’t be afraid to track down the owners of empty properties that could have potential – the online Land Registry is a good option here.

Local planning policy

Before you walk through the door of what could be the right house, it’s wise to do some local investigation to arm yourself with a good understanding of what works the planners might accept on the property you’re keen to view.

You don’t need to worry too much if you’re purely aiming to do internal works, as they won’t require planning permission. But there’s no point in imagining totally revamping the front facade and adding a shiny new extension if you’re not going to get it past the planners.

Have a look at whether the property still benefits from permitted development (PD) rights, as this could put you in good stead for some changes.

However, on a really involved renovation and extension you may well intend to go in for a full planning application, so understanding local policy before you buy is crucial. Check if the house is positioned in a protected area, too.

 

Designated conservation zones and areas of special interest will have more planning restrictions, potentially making getting permission for external alterations trickier.
Planning applications are logged with the local authority, so make use of these by investigating if works on nearby buildings have been approved.

Were there complications with the planning process, such as local objection? Does the property in question have its own planning history? It’s also a good idea to actually visit houses on the same road – can you see any evidence of recent works?

Looking at structural quality

It’s exciting to find an opportunity that seems to tick all the boxes on your renovation wishlist, but it’s vital not to jump straight in with an offer before establishing if the structure is capable of realistically offering what you want, if doing so is financially plausible and if the asking price is fair.

You don’t have to be a building professional to be able to get a good sense of the condition of a house when giving it a look over. Aesthetic upgrades, such as replacing dated wallpaper, carpets and bathroom suites, will need to be budgeted for, but the cost of doing so is fairly easy to predict.

It’s what’s going on behind the scenes that can be a little trickier to check and price up – stripping out and modernising the electrics and heating, for instance, could push fees beyond your budget.

 

Other problems to look for include damp and any structural movement, but these will probably need to be reviewed by an expert – more on key areas to investigate overleaf.

If a quick scout around shows that the amount of work needed is way beyond your project scope, there’s no point in taking things further. But if you think it might work for you, the next step (unless you’re extremely experienced in renovating) is to commission a building report by a chartered professional.

Obviously, the more thorough the investigation, the bigger the fee. It’s reasonable to feel nervous about commissioning an in-depth report before you know for sure it’s worth buying the property in question, but it could be riskier to go ahead with the purchase without one. Also, if it turns out that lots of work is needed, then you’ve got a good reason to haggle down the vendor’s asking price.Various levels of investigation are available, from a basic condition report (which you’re likely to need for your mortgage valuation anyway) through to a full structural survey by a qualified structural engineer.