Renovation costs - is it really worth it?

[ManyMaybes]

With such high costs of renovating these days, do people still think it’s worth doing? And for anybody going ahead, do you think there’s any chance of adding the same value to the house after the work?

It seems that prices have become so deranged there is no way a house could be worth the purchase plus renovation costs, unless people are expecting to pay a massive premium for a high quality finish ‘done’ house when moving home.

Renovating a fairly normal sized house in London to a high standard could end up costing you easily somewhere between £500k and £1m (or more!). I struggle to see how this can be worth it anywhere apart from the most expensive areas of central London. Usually houses that need work aren’t that much cheaper than recently refurbished houses so you’d be at big risk of blowing the top off the ceiling price on the street as well…

I suspect that's why nothing that needs work is shifting off Rightmove. Previously this would get snapped up and flipped pretty quickly.

People are still renovating in my tiny neck of the woods.
But everything was just started or half way through when prices shot up for them, as far as I know.
Apart from that, I cant see how it can be worth it, but I dont really know enough.

I am loosely involved, voluntarily, in a larger project. It is going through different stages on paper. No physical work started yet. Personally I hope it doesnt happen. Well not until things calm down. And if they dont calm down, not at all.

We’re doing a big Reno but we are in a European country so not UK. For me it’s def worth it as I’m making my dream home and love doing it. There’s value being added to the property but equally I’m doing a lot myself/ourselves as we enjoy it and are experienced- I wouldn’t do it if it wasn’t going to add value overall. After completion we will likely have 100k in equity in the house and a wonderful home that meets our needs so it’s a win win in our situation. I’m not sure I would do a big project if I had to ‘get people in’ for all of it.. the cost yes but also the effort of project managing something complex. I think that is often a workload that’s underestimated, even if you can throw money at it and renovation eats money!! X

Adding value to a property by renovating in a falling market, with the added issues of very high inflation of both materials and labour, is going to be a tall order. Unless of course you have the ability and time to do a lot of the work yourself ?

At present it is much harder to add value as there is high inflation on building materials and labour whilst house prices are stagnant or falling or only rising very slightly (depending on area).

If you purchase a house for the right price you can still make your money back, you have to have a good idea of what the work would cost to make the right offer.

Also if you purchase a house with potential to extend, that is often easier to resell than one without that potential, so even if you don't do the work it is an asset to have the option.

This is my ‘favourite’ fixer-upper.
https://www.rightmove.co.uk/properties/124238957#/streetView?channel=RES_BUY

Been on for over a year, starting at 450k, now down to 375. If they’d have gone at 375 last year would have been snapped up, however greed got in the way.
Hasn’t had a penny spent on it in 25 years by the looks of it, and has a dodgy upstairs bay window, and haphazard lean to at the back.
A decent property in this street/area is currently going for about the same price.

Your figures are way off. Renovating a normal sized house in London would not cost 500k to 1m. You could spend that but there is absolutely no need to.

We are hopefully completing on one on Friday and have possibly lost the plot but I don’t think so ! We aren’t doing it to make money but because for various reasons the layout suits is really well. It’s firmly stuck in the 70s currently with an orange kitchen and blue bathrooms but has been generally well maintained for the bits that matter but I don’t think many people could see past the dated decor.

Was on at 450k and we are paying just over 400k, similar around the corner is currently on for 580k though hasn’t sold as not much is currently Haven’t worked out exact budget yet but surveyor has said that apart from kitchens and bathrooms it is pretty much cosmetic. I think we can do it for around 50k. It has a beautiful mature garden that needs TLC but will be wonderful with not much being spent on it - patio and tree surgeon.

We are experienced renovators so have an idea what we are doing and no extension this time round. I have bought 2 second hand kitchens for about 2k which between them have granite worktop, larder and breakfast cupboard and a barely used Aga Masterchef for £800 so off to a good start. Boiler needs replacing and moving so our plumber is coming to quote for that .

We don’t plan to move so don’t really care about prices but I think if we were planning to we would ultimately make on it. I think if it needed gutting we wouldn’t have done it though.

we've shelved our plans. not because we were looking to realise the investment, we'll live here forever probably, but we just can't afford to do what we wanted to. i guess a fair few people will be in a similar position

Probably not worth it if you measure worth in financial terms only, and only at one point in time. I am doing a big Reno just now. I think at the point of being finished I will have spent about 500k more on it than it is worth. Started all of this pre crisis. But I don’t intend to sell it for 20-30years and by then its value will have increased and I will have had 20-30 years in my dream home. It’s not an instant money maker or for the faint hearted at the moment.

You can easily spend that much now. Have you seen the recent quotes for loft extensions? 100k in a lot of places in London.

I think it's really only viable for builders to do a flip just now, if you're buying in trades then you'll definitely lose money short term.

Of course you can spend that, but you don’t have to. Even with a loft costing 100k, you would have to be going some to spank another 400k! Of course if you are talking about multiple extensions and structural alterations on a 2500+sqft house then it can add up, but the idea that 500k plus is needed to renovate a typical family house is simply nonsense.

I think the OP was referring more to houses that needs to be gutted. That sort of thing. That is easily going to be 500k now.

Definitely worth it for me 🙂

We started our reno in November. The costs have been insane. We're doing it to make our home better for us, the layout didn't work etc. We've had to pull back some ideas and put a hold on some spaces, eg leaving the ensuite for another time. I think the end result will add value but we're doing a lot of the work ourselves like kitchen installation, laying floor and decorating. It's been tough.

The ones builders buy never get advertised. The EA knows the vendor wants a quick sale, phones his contacts, job done. They tend to need quite some work.
The ones on RM/Zoopla are for DIY’ers nowadays, to live in while they renovate.
These guys need to drive a hard bargain.

I think ‘paint, carpet and decking’ flipping is dead now.

No it really really isn’t unless they are absolutely massive and you want lots of top end fittings. There are definitely building firms out there who will charge you that much but that doesn’t mean that it is how much people need to pay. Prices have gone up but not to the extent you are suggesting. I am talking about a back to studs reno of a 1500sqft semi in London with a loft or side return. That will not be 500k unless you are being taken for a massive ride.

We're renovating a doer upper but aren't concerned about immediately making our money back as have no plans to sell. I'm happy doing this rather than buying and living in a 'done' house that's done up to someone else's tastes and needs.

This really isn't the case in our area if London. Have you had quotes recently?

The prices you have quoted are ridiculous, so I think it depends on what you mean by renovation. We bought a 4 bed house in London recently, and it’s costing us £120k to completely re do bathroom, en-suite, kitchen, new floor boards, full rewire, complete replaster, new staircase, then parquet flooring, new carpets, etc. But no extension.

The house was a good price when we bought it, and compared to other houses on the street, a steal. So we fully expect to get most of our renovation costs back when we are done. But also, as we will be living in it when it’s done, there’s also the fact that this is our home and it will look modern and fresh when we move in, rather than a house which hadn’t been updated in 30-40 years. But either way, the investment will be worth it.

Yes. Just finishing a project that started last year. SW London

Thank you! I feel bad sometimes that people are paying these huge renovation costs and thinking that that is just how much things cost these days. Quotes from full service building firms alongside architects fees are often absurd.

That's really interesting. Good to know. You must be excited and exhausted!

Definitely exhausted! But delighted with the result! Can’t wait to just flop on the sofa and not be thinking about light fittings etc 😂