First time buyer: what to buy old property which renovations or recent build contemporary property?

[srock]

Hi All,

My wife and I are looking to buy our first house in London. We have got a deposit of £70k and hence are looking for properties in range of £650-700K with 3-4 bedrooms and large open plan kitchen and living area. We have selected two properties in zone 4 and 5 with good schools and travel connections, but we are very confused about which one to go for.

Property 1: A 4 bedroom recently refurbished detached bungalow for £650 with all the needs which we have but in zone 5-6 (120 sq.m.)

Property 2: A 2/3 bedroom detached bungalow in zone 4 for £450k but needs full refurbishment and extension in zone 4 (100 sq. m).

In order to make it our dream house we would need to do:

1. Add glass french door from living to garden (£3000)
2. New bathroom (£6000)
3. New flooring (£2500)
4. New internal doors (£500)
5. New Kitchen (including appliances and a large platform) (£25000)
6. New main door (£500)
7. New toilet (£2000)
8. New bay window (£500)
9. Driveway (£500)

10. Repainting and replastering (£2000) 11. Rewiring and replumbing (£2000) 12. Single story extension (7m X5m) (£40000) 13. Solar panels (£5000) 14. Underfloor heating (£5000) 15. Removal of a load bearing wall to make it open plan (£1500)

In total, even if we add 10-15% contingency cost it would come down to £100,000 on top of the asking price of £450k

We are confused with:

1. What would be a better option to buy given that we have no experience and this would be our first property?
2. If we go with option 2 then how shall we finance this refurbishment given that we have only have £70k available and would need to pay for initial deposit as well?
3. Are our expectation of refurbishment cost more or less correct?

I know that there are a lot of queries in this single post but we are really confused and would appreciate any help/advise/suggestions on this. Thnks in advance :)

Do you need to do everything right away in no 2 or can you live there and do work as you have money? If yes, then I would go for no 2 as you would be adding value and can make the house exactly as you want it to be.

Doing kitchens, bathrooms etc. shopping around will save you money. We've done most of the things you've listed, some as DIY (youtube), shopping around etc so kept the costs down.

@Coffeist: Thanks for your suggestions. I think we can do some basics right now, move in and then do extension later on.

I think your costs for the second house are out and could come in much higher. Equally, things like solar panels aren't essential works etc.

How much can you live with it as is? Are you good at DIY?

We moved into a house that needed a lot of work and I'd agree with PP that it's great to be able to get things just how you way them. I would also say that some of your costings are on the optimistic side though... For examples, would glass French doors need a new steel lintel (and therefore extra making good)? I've been involved in building work before and still found I massively underestimated costs! So it might be best avoided unless you think you can live with phasing works for a while.

@OliviaBenson & @Steppingout: Thanks for your thoughts.

Our plan with property 2 is:

1. Buy the property with 5% or 10% deposit
2. Get some basics done like:

- New Kitchen (without platform) - Removal of a load bearing wall - Rewiring and replumbing along with plastering and painting - New doors (including main door) and new bay window - New wooden floor - Underfloor heating

1. Generate further funds for further renovations by remortgaging or by our own savings over a year. A mortgage advisor told us that we would be able to add value to the house by doing some basic changes and hence would be able to get funds for further work.
2. We can also take some personal loan from high street banks for the initial refurbishment in case the bills are running high (upto 15-20k)

I can do some basic DIY, not an expert for sure, and generally work from home so would be able to get myself involved in this.

• Rewiring and replumbing along with plastering and painting
• New doors (including main door) and new bay window
• New wooden floor
• Underfloor heating

Of your list I think you are way under with your budget with these. £500 for a bay window is way off. Same with a front door.

Is it an old house? What age is it?

Hi @srock,

If, in the long run, you are looking at extending this property a possible option would be to get planning permission as early as possible. That would raise the value of the property based on its future value and allow you to finance some of the refurbishment through a self build loan?

You could get a 2 year fixed mortgage and use this time to find an architect who will design the extension and apply for the necessary consents, do the detailed design and remortgage under a self-build mortgage. You could also use this time to make the most necessary upgrades, but I would wait with the bigger stuff until you do the extension.

Is property 2 in a much more desirable area? Would commuting, schools etc be much easier from that area? If so it does sound the better property.
Is it in a liveable standard? It’s just that when we did renovations we massively changed our plans over time (and the end result was much better).
If you can raise the money it might be better and more cost effective to do all the internal renovations at the same time as the extension is built. Sometimes if jobs are done patchily then the overall effect doesn’t gel. Also extensions, knocking through walls etc make such a lot of mess you really need to do them early in the process otherwise they might spoil some of the new things you have installed.
Definitely don’t do anything outside, especially driveway until the very last (the builders will ruin it!)

I would go for the one that needs work & is cheaper plus it’s zone 4.

Thanks a lot everyone for all your suggestions. We have decided to go with property 2 with 5% deposit and to spend extra on renovation. Will try to finish as much as possible before moving in and then rest gradually.

if you work from home, don't underestimate the mental impact of living and working in a building site while renovation is going on. Make sure you've got at least one part of the house where you can get away from everything and buy the best noise cancelling headphones you can find

We moved into a house that needed renovating. We've now been here 12 years and not finished it.
We had a few changes of circumstances that led to delays. We've just had a single storey extension 6mx3.5 and it cost £45k just for the shell. Wiring and plumbing, on top. It costs a lot more that £2k for a house rewire. DH is very cautious with expenditure as is self employed so hasn't driven the completion forward. My advice to anyone taking on a project is to make sure you have the money and drive to crack on and get it done.

@37KAT: Thanks for your note. I believe my estimates for wiring, plumbing and fittings were way off and thanks for pointing it out.