Are you cut out to buy a fixer-upper?

Spring has arrived and the air is once again filled with the sound of birds chirping and lawn mowers buzzing. Or do you prefer hearing the shrill sound of an angle grinder?

A recent survey of 34,000 home movers by Rightmove found buying a fixer-upper property that needs work is a popular choice. The results found 73% of renters see fixer-uppers as a more affordable route to homeownership. This statistic is not surprising, given the portal found fixer-uppers can be heavily discounted. They have an average asking price that’s 12% lower than their better-condition counterparts.

Some buyers find a fixer-upper an exciting prospect, with 73% of existing homeowners saying a property that needed work doing to it would give them the perfect opportunity to create their dream home. 

For others, a fixer-upper is all about adding value and potentially turning a profit. You may have heard of the saying ‘buy the worst house on the best street’ and it’s a mantra property ‘flippers’ adhere to. 

The aim of the game is to buy a property in poor condition, spend a careful amount on improvements and upgrades, and sell it on for a profit. For this to work, however, the owner needs to sell the home for more than they have spent on the initial purchase and renovation works combined. 

If buying a fixer-upper is on your radar, there are a number of considerations. Have a read of the below and contact us to talk over your options. 

How much are you prepared to fix?

There is a sliding scale of seriousness when it comes to fixer-upper properties, and your willingness to take on complex projects should influence your search. You’ll often find properties described as ‘in need of modernisation.’ It could be a dated kitchen or an avocado bathroom suite needs ripping out, or you could be looking at replacing single glazing and upgrading storage heaters to central heating. 

If a property description features the word ‘dilapidated’, expect to carry out work of a far more serious nature. There could be unfinished structural projects, vandalism, damp or subsidence, or the property may be off the mains water system or National Grid. 

Mortgage matters

There’s a lot to pre-empt and unpick when considering a fixer-upper and the order in which you investigate matters. The crux of the conundrum lies with the ability to secure a mortgage. Many lenders will not consider a dilapidated property or a home that’s of non-standard construction. 

They’ll want a home to meet certain standards in order to lend money, such as having a working kitchen, hot water and central heating. Fallen in love with a tumble-down cottage that draws its water from a well? You may have to park that idea unless you are a cash purchaser.

Forewarned is forearmed

Although a survey conducted after an offer has been accepted will unearth flaws with a property, this may come too late in the buying process if the purchaser needs a mortgage or is constrained by a budget.

The sensible plan is to book an early building survey before an offer is made. A RICS Level 3 survey is the most detailed, with the surveyor assessing the property’s structure, materials and condition, and identifying potential issues, defects and necessary repairs. It’s an upfront cost but will allow you to make an informed decision - especially when it comes to offering a sensible amount and budgeting for renovations.

Fixer-upper checklist

• Have a team of reliable trades

• Employ a reputable architect

• Liaise with your local planning department ahead of work

• Always get estimates before appointing a contractor

• Work out where the money for labour and materials will come from

• Factor in VAT when budgeting

• Have a Plan B in case you find living amidst renovations too disruptive

If you’d like a list of properties for sale that are in need of improvement, get in touch.