Buyers underestimate true cost of fixer-uppers
While buyers and investors often look for a renovation project to generate value they could face costs of over £170,000 to bring it up to the standard offered by today’s new build homes, according to new research from the Home Builders Federation (HBF).
In its Nothing Compares to New report the HBF found that buyers often under-estimate the costs of bring a property up to modern standards. More than half (56%) of adults said they wouldn’t expect to spend more than £50,000 to renovate a ‘fixer-upper’, while almost a third (29%) expected to spend £25,000 or less.
However, HBF estimates that renovating a three-bed semi-detached property to match the energy efficiency, comfort and technology found in today’s new build homes could cost around £170,000. Yet only 1% of respondents expected renovation costs for a ‘fixer-upper’ to exceed £150,000.
The role of affordability
The latest report also reinforces the role of affordability, with 42% saying that mortgage affordability limits could force them to buy a property requiring significant renovation work, rising to 54% among 25- to 34-year-olds.
Steve Turner, executive director at the Home Builders Federation, said: “Many buyers believe that renovation projects offer greater long-term value, but our research shows that the reality can be very different. The added value of the technology and modern features built in to today’s new homes is easily overlooked, while the cost of upgrading older homes to the same standard can quickly add up.
“Today’s new build homes are designed to include many of the features buyers can spend years and thousands of pounds adding to older properties. From energy-efficient heating that can significantly reduce ongoing running costs to contemporary layouts and specifications, new build buyers can focus on making the home their own from day one rather than spending money and effort on modern upgrades.
“Renovation projects can be rewarding for some homeowners, but it is important buyers are fully informed as looking beyond the asking price and consider the ongoing costs of improving, maintaining and running a home can make a significant difference when assessing long-term value.”
