Would buyers question a £50k rise after modest improvements in five years? What would you want to see done?

[DecisionTime123]

I'm looking at a house offered at £325k; good area so houses in that road go for minimum £375k, I can see all the Rightmove/Zoopla listings and you don't need to do much to sell for the higher price. I thought I was getting a bargain as owner (builder who took it in part exchange) wants a very quick sale. My plan was to decorate, carpet and put a new bathroom in, maybe a new boiler, and that's it. I can't afford to do much else. But the thing is I wanted to sell on in maybe 5 years - so in 5 years time, having spent less than £20k, if I put it on the market for the price they normally go for (now), what will potential buyers make of the apparent £50k hike?

Will they say hey yes still a bargain and less than the one next door? Or will they say who does she think she is, putting in a new bathroom and now wanting £50k extra? How does that seem to a buyer? Too much too soon? Or entirely reasonable bearing in mind I bought it below market value?

I'd worry about what was wrong with the street that made you buy and sell a house within 5 years tbh. I don't understand why people take a perfectly fine house just to "renovate" it to sell, when a person who wanted to live in that house could have bought it for the reduced price instead. It's different when the house is falling apart but it doesn't seem this was the case and I'd assume there's a problem with the area.

You can"t predict five years time, be careful you are not overpaying now, how much did they buy it for and when, that is important as interest rates look to be on the rise again.

We have lived in our house for 5 years (bougth at 475) and it has gone up 100k. We did put in a new unsuite and refresh the kitchen (new worktop and had cupboards painted) but that's it other than a lick of paint. In 5 years time the value would likely have gone up even without improvements. I wouldn't question a 50k rise in 5 years. The photos taken when you bought would look different anyway as you have different furniture etc.

Did you get 575k when you sold it?

We owned our last house for 6.5 years (purchased Feb 2018) and when we sold it in Sept 2024 its value had risen by 230k.

However, we had totally transformed the place (new in-frame kitchen, new bathroom, new boiler/rads, new timber front windows, rebuilt the extension and created a 0.5 acre garden), so it was clear to see the improvements we'd made in that time.

These changes cost us 80k, so we still made a decent profit. We are/were also mortgage-free so no monthly interest repayments eating into that.

I wouldn't necessarily question a 50k rise in five years - but I would expect to see obvious improvements from when it was last purchased...and in the current climate who knows what the market will look like in 2031?

See thats the thing, houses purchased pre-covid then shot up in value, so not sure we can look back and compare. Its been valued at £325k by the mortgage valuation (not done survey yet) and I thought oh, hang on, so is that the actual fair market price?

Seriously? Is it not normal for people to move up the property ladder? You’d be horrified when faced with my parents then who were on their 7th home before I turned 10, having moved from their starter home to a 4 bed detached!

It's a very sought after area, so I'm not concerned, and if I have to sell in 5 years it will be due to retirement and relocation. I'm buying possibly short term now due to divorce. I'd be worried if someone was selling in 2/3 years but not 5, life changes whether you like it or not!

Also to answer @KeepPumping the current owner has been there about 13 years so not sure their purchase price will help when weighing this up? £325k is really more than I wanted to spend but if its going to show a fair return over the possible (short) 5 years then I'd be willing to take the risk. But I just want a small risk!!

I could not give two hoots what the seller paid as long as I was buying for a fair market value.

Selling relatively soon after buying (i.e. within just a couple of years) would make me question why (what with the significant costs involved) but if there was a plausible reason (moving away, divorce etc) then I would not overthink it.

Who knows what the housing market will be next week/month/year/5yrs?????

Why would you think that? People move for all sorts of reasons. Change of job, increased family size, upsizing/downsizing due to increasing or decreasing income or mobility issues, perhaps moving into an inherited house, etc etc.

£50k on the house the OP is looking at isn't much more than 10% so price variation could easily be due to differences in decor, bidding war or a motivated seller.

I really loveeeee this flat but the delusional owners purchased it only3 years ago for 300k and want 375k (75k more) despite no significant improvements save for a nicer shade of carpet. In real terms it's actually gained only 6k of value as bury isn't an area that rises that far esp for flats.

https://www.rightmove.co.uk/properties/170771690#/?channel=RESBUY

Our house went up by £100k in 5yrs. Bought in 2018, sold in 2023. We had new bathroom, new boiler and new flooring upstairs. Times and areas are different though.

I wouldn’t question a house bought and sold in 5 years at your prices. Perfectly acceptable time to live in it then move on.

If someone was selling so soon I would think there was something wrong with the street, the house or the neighbours. Especially in a nice area. But i'm just suspicious like that due to experience.

Just wanted to clarify: I am posting asking about a price rise on a 3 bed semi in 5 years, would £50k on a purchase price of £325k (which is being done to achieve a quick sale) be reasonable in the South East if it has a new bathroom, new boiler, carpets/hard flooring and decorating.

I can't promise to stay in any house for more than 5 years, at any price.

I really don’t understand why people are fixated on what a property cost when the owner bought and what’s it’s being marketed at.

The property market changes, areas and roads change. Economics environment changes. Work undertaken may be superficial and decorative or structural or infrastructure (eg pointing, rendering, new boiler) and expensive. So much of that is unseen.

if you view enough properties you will have a good instinct as to what it’s worth now, and likewise when you come to sell. What are you happy to pay?

Those were the low interest rate years, cheap mortgage years, houses are losing value now because borrowing costs are going up.

If mortgage rates go to around 9%, where I think they are headed, it won"t go up in value, it will lose value.

Actually they weren’t during that period of 2023. It was October, Liz Truss’s mini budget had struck and house prices plummeted compared to the spring and mortgage rates were higher than they were now.

Correction: Offer in October 2022 just after Liz Truss’s mini budget, completed early spring 2023. Mortgage rates were awful and house market was stagnant.

Nobody has a crystal ball about the housing market in general. But I think if similar houses on the road (or roads around it) are often being sold for more and you can be honest about the things those houses might have that you either can't change or can't change without significant money eg extensions, loft renovations, drive ways, larger gardens and you still know this is priced to sell them I don't think you have too much if an issue.

Just be aware of materials/labour costs for stuff as it's a lot more expensive to do plastering, kitchens bathrooms than it used to be.

I made 43k on a house that I had only repainted in the 5 years I had it because I bought it around financial crash, priced to sell and in a popular area which was booming when I came to sell so these things are possible. It doesn't even bear thinking about what that house would go for now tbh, would be a lot more. I think 5 years isn't a ridiculously short time to be in a house but I have noticed recently the more you do to it doesn't seem to cover costs so I wouldn't be looking at doing anything major or spending a lot extra on personal tastes if you don't think you'll be there too long.

Surely they won't know what it was like when you bought it when you sell it in 5 years time? I think you are overthinking.

i don’t think anyone will take much notice of the price you paid. They will just compare it to similar houses for sale at the time, and judge for themselves what it’s worth paying for it.

Even Zoopla seems to ignore blips in the price when for whatever reason someone buys a house cheap. Ok I know Zoopla doesn’t always give an accurate valuation but, just to make the point.

We got our house for £450k because it was a mess and needed a lot of work . Other houses in the road normally went for £500k. Zoopla now shows our house as being worth £550k, the same as other houses in the road even though we got it cheap.

I think potential buyers will simply be guided by the housing market at the time. Which for five years time is very unclear right now . If interest rates go crazy, you may even find that the house is worth less in five years.

Completely depends on what the market is like in 5 years - there's really no hard and fast rule or a way to predict.

Our house sold for 20% more than we bought it (£77k) after four years (with no major improvements apart from a new bathroom). But I think we were lucky in that we got a good price during COVID and then had a very motivated buyer four years later. Right place right time.

I'm looking at a house offered at £325k; good area so houses in that road go for minimum £375k ... I thought I was getting a bargain as owner (builder who took it in part exchange) wants a very quick sale.
Is nobody else suspicious about a builder giving away 15% / £50k?

@senua valuation (just for mortgage) has come back ok so not sure what to make of it? But yes you could be suspicious, but it's a part exchange with a major corporate builder not Fred down the road so I think that's what they do, just to get it off their books?