Renovate a cheap, older property or buy new with no changes?
Supposedly, many first time buyers have been frozen out of the property market. You, however, might want to buy property and may be in a position to do so. You may have either saved up a decent sized deposit or someone (most likely a family member) may be helping you.
Before you even consider buying you need to decide what type of property you want. Will you invest in something old, less expensive and in need of a slight makeover? Or will you buy a property at the higher end of your affordability scale that doesn’t need any TLC? Or would you prefer a new build property which again, does not need any TLC and has a high chance of incentives and offers from the developers? New build developers are finding themselves in tough times at the moment and incentives range from stamp duty paid to free cars and holidays!
Both types of property have their advantages. Depending on the city in which you purchase, an older property can cheaper and you can renovate it to your heart’s content. The newer property may be more expensive but there’s often no need to incur any renovation costs.
There are many factors to consider. Will the financial institution grant you more credit to extend a property if that’s on your list of things to do? Will the planning department allow you to install double glazed windows etc? Is it a listed building whereby in reality, very little can be changed. Your personal preferences are also important here. Some want the thrill of renovating their own property. Others may prefer to move into a new property immediately and not having to spend precious time and money on renovations.
We’ve compiled a short and handy guide to some of the advantages and disadvantages to both when considering either type of property.
Advantages to renovating
You could renovate to sell the property. This could be risky, though. Is there is a market for the property? Also make sure that you do not go overboard with the renovations – not all buyers want all the extra finishes and a previous owner’s personal stamp.
- You can design your dream house. You decide what goes where and you decide how much of everything you want.
- A property in need of renovation, in a good location and purchased at a reduced price could provide a tidy profit.
- Believe it or not but it could be fun and bring a great sense of satisfaction at having ‘created’ your own home and ambience.
Disadvantages of renovating
- You will need more than one weekend to do renovations. Do you have the time and the commitment to undertake what could be a huge task? This may mean you can’t use your kitchen or bathroom area for a while. Are you intending to live in the property whilst you renovate? If so, how might this impact on your family or personal life as well as your own wellbeing in what could be a building site? Depending on the scope and scale of your plans, you may also need planning permission.
- You may spend more on renovating than you would if you were buying new. Renovating is a long-term project and you need to budget for emergencies as well as a change in the plans. Have you costed and budgeted effectively for the project and have you included a contingency budget for the inevitable things that go wrong or cost more than expected?
- Expect your personal stress levels to rise.
- There may be a risk to your investment and mortgage providers may not approve funding where major structural alterations are planned.
However, depending on your outlook, buying a new property may be as stressful as renovating. You want to get the best value and you want to find a property that fits the profile of your ‘dream house’.
The advantages of buying new
- It’s new. No-one has lived in the property before so you get to use everything first.
- Your property will be greener: the Kyoto and Rio Earth Summits have ensured that all new houses should conform to the Standard Assessment Procedure (SAP) of the UK government. The government will increasing crack down on energy inefficient homes so developers of new build properties should have done all the hard work to ensure your property conforms.
- The resale value of the property should, in theory be equivalent or more than what you’ve paid.
- If you are buying off plan there is often the option to upgrade or choose appliances, fittings and finishes.
- If the property is brand new, you will be asked to complete a ‘snag’ list and all appliances will be under warranty. The ‘snag’ list gives the developer a limited period of time to rectify any faults or issues. A benefit you would not have when purchasing an old property.
The disadvantages of buying new
- Brand new properties could be much more expensive, though this does depend on the area.
- If you are buying off plan and the development is not due to be completed for a while, will you still have the same enthusiasm for the property when it comes to moving in?
- Building companies are creating smaller properties in order to squeeze as much profit as possible out of each unit and this could also mean cramped conditions or no parking for your vehicle.
- There may be more sharp edges and less character. Less character may mean that the interior design of your home has to conform to the fixtures and fittings. Your new build properties may not rest comfortably with modern fixtures and fittings and your ‘bohemian’ furniture.
- A new build property will in time, become ‘old’. If it’s a flat, the communal areas may show signs or wear and tear quite quickly. The freshly painted gleaming white walls and glistening tiles may end up looking quite grubby. With an old build property, the wear and tear is all part of the attraction.
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