What would you offer?

[Blomama]

We've seen a 3 bed house that we like in SW London. It's a 1930's end of terrace with a wraparound extension downstairs and an attached garage. Because it's a corner property, the garden is huge. Bigger than anything I've seen in this area. It's 5 minutes walk to the station. The problem is that it's a complete wreck. Will need new wiring, remodelling downstairs and a wall removed with steels to prop it up, new bathrooms, new windows, new flooring/carpet, replastered in many rooms, fitted wardrobes, new kitchen, new white goods, new garage door, new patio layed outside, new sliding/bifold doors and finally decorated. I'm sure I've missed something! It's on the market for £700K but the ceiling price in the area is around £850 for fully renovated and extended 4/5 bed homes (usually with loft conversions).
We are finding it difficult to know what to offer because of the awful condition of the property and the enormous garden which is just so unusual in London. Any suggestions?

How long has it been on the market?

Are you in a chain ? If not , try your luck at 630k stretching to 650k . But do you really want to be doing all that work . I’ve renovated a fair few times and I found it stressful, horrible and totally fell out of love with the house way before it was finally finished . Couldn’t think of nothing worse now .

It's brand new to market this week.

We've done a fair bit of renovating/building work but nothing of this scale. It's a hoarders house and there is stuff everywhere so it's actually quite difficult to see the walls upstairs. Yes, we are in a short chain.

If the location is perfect, I'd offer £650k. If demand is high, it will go for asking price, just because it's London. I'm assuming not a listed house?

How much of that work is needed (like a rewire) vs desired (fitted wardrobes/bifold doors) as that’ll hugely influence what’s a reasonable offer.

Nope, not listed. Thanks for advice. Sadly I fear you are right and a cash buyer will outbid us. I think it will need £150 - £200K worth of work so I'm not sure anything over 650 would be worth it in money and living through the mess.

Here's a photo of a window to give you an idea of the state it's in. One window was being held in the frame with an old scarf shoved in the gap.

All the build work is necessary...patio/wardrobes etc is just what I would want in a house and what the other houses in the area include to reach the higher asking prices.

The work you’ve described sounds expensive although I’m sure it will mean a fab house when it’s done!

Try to work out how much it will all cost and how long it will take. Then add 25-50% to that cost and double the time! For the scale of renovation you’ve described (basically a back-to-bricks) I’ve a suspicion that you’d end up with 250k worth of work, although you may be able to phase it. If it’s 250k, I’d be more tempted to offer close to 600k and see how it’s received, but with a nice letter explaining how you got to that figure (factoring in estimated £ psf for renov costs, etc) and explaining why you’re the best choice (ability to exchange quickly etc).

Also, would you plan to live there while the work’s being done? Re-wiring, remodelling, new supports, etc are invasive but renting costs really eat into any budget.

It does sound like it would be amazing when done though! The garden sounds fabulous.

Presumably it’s been priced accordingly. It’ll probably get snapped up. If it doesn’t, that’s your opportunity to make a low offer. I don’t think the low offers being suggested by some posters will get you anywhere when it’s only been on the market for a week. There’s something about house-buying that turns normal reasonable people into inept cut-throat-dealer wannabes.

What position are you in? We’ve just had an offer on ours before it even went to market. It’s another fixer upper. We probably wouldn’t have considered a lower offer, but they are cash buyers with an offer on their house. Even then it was only 2.5% below asking.

I would leave it to a developer and keep looking.

Do you mean because of hassle or poor financial return? I can cope with the renovation, I just don't want to make a poor financial decision and buy a money pit.

Hoarder houses can have structural issues with the floors. Has it been cleared and we're you able to walk around and see what the floors were like?

Partly because of the hassle.

But also because there is no way of knowing how much a house in that poor condition is going to cost to renovate. It's a massive risk and could well turn out to be a money pit.

It will be a money pit. If you have a lot of extra after buying it and are up for a challenge then sure - but am guessing it will go at least for asking due to the size of the plot. And you have no idea what’s hiding in there if it’s still filled with stuff.

Knock it down and build four GBP 500k two bed flats. Probably the only way to turn a profit.

This is not an option. The current owners have had planning permission for flats and 3 terraced houses refused. The council are only approving planning in this area for extensions to a single dwelling.

I'd be wary of the amount of work required and ceiling of prices in the area. I'm not sure the really huge garden and proximity to the station as individual positive factors are going to attract the same category of buyers. People who really care about location to station are probably commuting more frequently/not WFH or hybrid workers and therefore likely less motivated by the idea of a big garden to maintain and vice versa.

The cost of materials and labour is phenomenal at the moment, we're moving next week as it's much better value than the attic conversion we would have done on our current property where the cost of the work would have vastly outweighed any added value on house.

Thanks, that's really useful to know.

We're in South East London though, but an area that has seen a lot of recent growth in house prices. I think London has its own dynamics at the moment as particularly with crossrail/other transport developments it's changing the way people feel about living inside zones 1-6 and how much they're willing to pay.

Based on very recent quotes we’ve received recently (Home Counties, not London) you are looking at well over £200k for those works.

Wow, work in London is expensive! I just costed all that up and depending on the spec of the kitchen/ bathroom/ flooring I reckon I could do it for 80-100k. But I’m in the provinces and I know a lot of trades. If it’s that much in London I’d keep looking.

I wouldn't offer them anything, definitely not at present. You could always keep an eye on it and consider it again if it gets reduced. I would want the house to be an excellent one now as the cost of work is so high and the hassle is immense too.

Thanks everyone, it's been helpful to hear opinions. General feedback seems that it's not worth the agony and given the cost of building works, the renovation would exceed the ceiling price for the area.