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 bought a terrace in London almost two years ago and renovated it last year (two new bathrooms, new kitchen, redecorated everything, added laundry upstairs, totally relandscaped garden adding tiled seating area, pergola etc. Spent about £110k). You'd have to have a pretty large house to spend £500k-£1m on a renovation and that would include a loft conversion and extension or a basement dig out to get to those figures.
I bought the house knowing full well what needed doing, and compared the price it was on for with others that were in better shape sold for. I didn't want to spend more than the house would be worth at the end.
I do know someone who sold their huge house for £7m, the people who bought it must have spent a couple more renovating, but I'd still say it's worth over £9m now. When you get to those figures people tend to have ALOT of cash and aren't so much worried about resale. I'm not so worried about resale either - I plan on staying in it for a while, and houses are still selling briskly around here. A quick check on rightmove just now and I would have made about £75k over and above purchase and renovation costs. Well worth doing to get the house the way I wanted it.

As you said, some building firms do quote extortionate amounts. At the very beginning, before we added on more works, one general contractor quoted us £85k for just a rewire and skim and paint. Another contractor quoted us £40k for the same. You need to look around.

In the end, we have gone for individual trades, and after meeting several for each speciality, found trades who have been great to work with and charge very reasonable sums. It’s been a bit of pain having the get the timings right between the works but it’s worked. Our house is also on the bigger side, so 4 bedrooms and 3 living rooms, and it’s definitely not costing us £500k!

This is the same debate every time this topic comes up since people have different expectations on the finish. I mean a high end kitchen alone could easily cost £100k. Loft and extension and often quoted at 100k + 200k, not hard to see how a major renovation will cost 500k, equally you may have basic work done by a builder for a lot less but the result might just be an unappealing few square meters added with no wow factor. The bracket OP suggests is probably for £2m pound property market, it certainly is in line with what I gathered talking to acquaintances working in this field. Again, not saying you can have a house done for half this, it will just not look as good (obviously)

Agree with pp, we are doing a ground floor and loft extension in SW London, back to brick refurb elsewhere on 1,600 sq ft in total and £500k is not unrealistic.

We plan to live in the house for a decade +, otherwise we would not be doing this work.

we're rural SW and a single story extension / loft conversion on our 3 bed ex council was looking at >£200k, and that's with us tiling / painting / doing a bit ourselves and reusing our existing kitchen. no garden work / nothing particularly high end or fancy

I've just seen a house on RM that sold about a year ago - we viewed it early last year. It's now on for £100k more than last year's price. They appear to have redecorated (decor that won't appeal to a wide range of people), replaced a beautiful set of French doors with Crittal ones that don't look good with the rest of the house and put some decking at the bottom of the garden. Kitchen still looks the same, still got separate loo from bathroom. It needed rewiring so no idea if that's been done. Very much doubt they'll get the new price!

If you know the London market you will be aware that most 2m houses don’t have 100k kitchens and are not particularly massive. If you are buying a 2m house near me and spending 500k on renovations you are a fool. Larger detacheds at maybe 3.5+ those figures start looking more appropriate. The vast vast majority of homes don’t fall into that price bracket unless you are in prime central London.

We finished a reno earlier this year and have lived in the house a couple of months. It's been well worth it for us although we won't make back the money we've spent for years. We spent about 30% of the purchase price on the reno, it was already the biggest/most expensive house on the street. We haven't extended but everything went back to brick, some walls moved, new bathroom, kitchen, roof work, replacement heating system.

BUT longterm it works brilliantly. The location is amazing and will last us a long time - we have parking but also bus routes close by and shops etc within east walking distance. There is plenty of space to WFH and for DD to have friends over but there's also space for a downstairs bedroom and already a downstairs bathroom should we no longer be able to manage the stairs in the future. We've put in extra insulation, solar panels and an ASHP which should help future proof us with energy costs too.

I don't think the costs are worth it for flipping houses any more but yes for a long term house.

Except it really can. Our house really is going for the wow factor. Houses on our street go for £2-3m. We didn’t spend as much as our house needed the refurbishment, but we expect its value to go up to that bracket when it’s done.

If we went for the first contractor we met or first trade, I can easily see how the costs would have shot up, but we spent time researching it. And these are legitimate trades and contractors we have used, rather than cash in hand, found on Facebook.

As I said initially, it’s all down to personal expectation, ultimately if you are pleased with the result of your refurb that’s all what matters.

I read these threads quite often and think that there is a mental block some people have with people spending less than them and being able to see that it is possible to have the same finish but spend less by really shopping around and managing the build well. I do understand it, if you are spending loads then you kind of need to think if people are paying a lot less than it will be an inferior finish.

Yes, you see it all the time. I can understand why though as it would be pretty would destroying if you thought you had spent an additional 100-200k+ for nothing. Ironically IME the lower overall budgets often have higher end fittings as people who have bought an expensive build package often then run out of cash for the FF&E.

I think you should get more quotes. I am SW down from Bristol and my architect said a month ago that you are looking at 40k low end on a loft and 60-70k for higher spec. He works with a local loft company regularly so is talking actual recent prices rather than pie in the sky ones as they can be. Uncle is a builder and hasn’t done any recently but his friend spent 55k on one recently and that was including other things.

Is the extension huge?

The only people I know (and I'm one of them) doing renovations at the moment are those who are taking on the chin the fact that they may not see their money back soon (or at all) but are happy to spend it regardless. I think making money by renovating is now impossible unless you're a professional- we're unlikely to see costs come down much or house prices go up much.

(I also think a lot of people who think they made money by renovating over the last 20 years actually just made money on price increases and would have made as much or more without the renovation, but that's another story...)

We’ve just completed a whole house reno which has cost an eye watering amount-at least double what it would have cost a couple of years ago.

A friend involved in property agrees with me that if we put it on the market right now we’d make our money back, maybe nudge just into profit, but this is a very long term house so we’re not overly bothered at this stage

I think that’s a good point @RandyMiceDavies (i LOVE your username), we’ve renovated four properties in a part of the U.K. that has seen massive price rises and while we have made a lot of money (we could never ever have had the deposit we ended up with), I think that a huge part of our success was in the prices rising themselves. I adore renovating and would do it again and again if there were tax breaks like in other countries (in that I actually am quite passionate about old housing being brought up into safe, comfortable, convenient homes that people have decency and dignity living in), but was just discussing this with my amazing builder and saying that the numbers just don’t add up right now. Joiners making 5.5k a month right now! Good for them, we should be getting people into trades.

Also there’s renovating and renovating, I know because I’ve done many different levels! Putting a new bathroom/kitchen in, repaint and tidying up is very worthy but not in the same financial league as standing in your windowless house back to brick inside and out and looking at the rafters! Which is frankly what a lot of old U.K. housing stock needs.

This is v interesting! How much are you paying per square metre? It sounds like I need to speak to your builder haha!

Based on the numbers suggested to estimate Reno costs, for a full refurb I.e. replastering, flooring, plumbing, wiring, all bathrooms and kitchen I keep ending up at huge numbers.

Let’s take a 200sqm house (for easier calculations - I realise this is larger than average, but not huge). If you managed a £2000/sqm budget this is £400k before any VAT or other fees. And this is what I understand would get a pretty basic finish.

If you look at something like Don’t Move Improve you will see loads of fairly ordinary looking houses, often in mid-price suburbs (not premium central) going for the full works, with high end architects etc. I would imagine some of these spend close to 100% of the cost of the house…

It’s good to have this information when considering buying a renovation project, to use as a bit of leverage on the vendors, especially if it’s in disrepair.

It can be done cheaper if you are ready to wait - wait for the cheaper contractors to have free slot, wait for cheaper roof tiles to be back in slot, etc.
Doesn't add a lot of value but at least closes up the door to lowball offers driven by arguments that this and that's needs changes, have you seen the prices etc.

I must admit having ripped previous place to pieces and extended I wouldn’t be keen to do a full renovation currently and I do agree with the point about benefitting from rising house prices in some cases.

I think most people looked at the one we are buying and thought it needed more than it does (I hope, watch out for a “Help bought a house and it needs much more work than we realised “ thread from me in 6 months).

Having said that I still feel some people spend more than they need to in some cases. As with most things in life there is a balance to be had.

Where are you getting 2000 a square metre from for reno costs? Take a 4x5 metre bedroom. Do you really think that it would cost 40000 to rewire, replaster, redecorate and do flooring, even if you replaced the windows in a sash bay with new double glazed wooden sashes you wouldn’t get to 40000

The house is 233 square metres. So I guess the cost per square meter is £120k divided by 233? This is my first refurbishment project so I’ve never looked at it as a cost of per square metres…

I also forgot to mention the £120k included new internal doors, roofing repairs and taking down a couple of the chimneys, as well as installing a new gas fire place and getting new radiators in all the rooms too.

It really was a case of shop around, and we are also project managing ourselves, which isn’t easy when we both work and have a toddler. One thing I also realised is that it helps to try and get a basic quote before they see the house, but obviously it depends on the trade. For example, for the plumber to drain the system, install the new radiators and get the system up and running again, a couple of plumbers came round and quoted £7-8,000. We contacted another plumber who didn’t have time to quote if we weren’t going to go ahead and use him - without seeing the house, he quoted us £1,500. I do think there is an element of mark up because they assume you can easily pay if you’ve just bought a nice house in a nice street.

We also took a gamble with our plasterer. He gave us a great price for a complete replaster, because he was really keen to do the job. We figured worst case, he does a crap job and we have to pay twice but best case, it works well. Luckily, it worked well.

When looking at some of our quotes, I can easily see how the costs could have been 2-3 times what we’ve paid if we didn’t spend time finding the trades. But the people we have worked with have been excellent and their quality of work has exceeded my expectations.

I'm doing a live in reno. The costs are not as eye-watering as some because the layout is already perfect bar the odd stud wall to create a dressing room and utility - some rooms were too big rather than too small! So no extension needed and the roof is sound.

Every room will go back to brick, it's had a full rewire and almost full re plumb so far and we're doing a room at a time now fully reboarding, plastering, new ceilings and floors bar the original parquet flooring downstairs.

Currently on bathroom 1. Still bathroom 2 and kitchen so big expense to come but in total we will spend around 70k doing the majority of labour and material purchasing ourselves. I think pricing the full project out would have been £120k ish.