Renovation project as first time buy

Journeywoman

Hi, I've just joined the forum!

As my title suggests, my partner and I are first time buyers and we are looking at renovation projects.

We have saved up a pretty good deposit between us. We're looking at properties around £125,000. I've seen a 3 bed detached property that has LOADS of potential. I know the potential is there to more than double the value of the property.

The problem is I've heard that mortgage lenders will almost point blank refuse to lend if a property needs 'complete renovation'. We need a mortgage. So how do I know if it's even worthwhile looking at the place? We would even be willing to look at a bridging loan if possible...

I literally don't know where to start.

The house has a very outdated kitchen and bathroom, so it would be possible to live there, albeit rough. We are used to caravans. We could even get a caravan there,no problem., As stated by the agents the property has Services - Mains electricity water and drainage. Mains gas available - none of the Services have been tested. Oil c/h, not tested. Telephone subject to B.T. Regs

My partner is a builder so he would be looking to take on the property basically instead of a full time job. I'll be bringing in a full time wage. We have the knowledge and background to take on the project, we just need to secure the property somehow!

If there's anyone who is in a position to offer advise based on some actual figures of our financial situation, I'd be happy to talk further via private messages.

ANY advise would be MASSIVELY appreciated!!! Thanks in advance!! :T

Rambosmum

Properties are usually considered mortgageable if they have a working and usable kitchen and bathroom. The kitchen needs a sink in place and either a gas pipe for a cooker or a electrical point for one. And a bathroom needs a toilet and a bath or shower. Whether you personally would want to use either is neither here nor there. Walls mostly plastered and floors with pretty much complete floorboards are also necessary.

We've just bought such a house and had no issue getting a mortgage on it, we had about a 20% deposit.

Just remember to do your sums about how much it will cost to do the work and think about how you will pay for this.

sparky130a

Journeywoman wrote: »

We have saved up a pretty good deposit between us. We're looking at properties around £125,000. I've seen a 3 bed detached property that has LOADS of potential. I know the potential is there to more than double the value of the property.

I'm sorry to break it to you, but you "know" nothing of the sort.

Mainly because um, you haven't even purchased it yet.

My bowels had potential this morning. Unfortunately the toilet reports they didn't come through.

AFF8879

Is this inspired by homes under the hammer?? Hehe

I bought a flat in London last year as my first home and renovated it top to toe! It was habitable / mortgageable however, just in dire need of complete refurbishment. I love it and am now thinking of my next project!!

Though like sparky says, it's never guaranteed that you're going to add value over and above your costs. Especially if you're renovating it as your own home, as I discovered, it's always tempting to splurge on the higher end fixtures, fittings, appliances etc...

Just keep a tight rein on the budget and you'll be fine - from what you said it sounds like mortgage won't be an issue, lenders don't care if it looks terrible, as long as it's habitable.

dirty_magic

If you can live in it it should be mortgageable. Usually if a property isn't mortgageable it's advertised as cash buyers only to save wasting anyone's time.

Just make sure there aren't any hidden nasties that will cost loads to fix if it looks like the work is mostly cosmetic. Your OH should be pretty clued up if he's a builder.

As above, it's so easy to get carried away when you see all the things you can have if you're doing it up to live in. We've definitely spent more than planned, but OH did most of it so we saved on workman costs, it's definitely a huge advantage.

kinger101

sparky130a wrote: »

I'm sorry to break it to you, but you "know" nothing of the sort.

Mainly because um, you haven't even purchased it yet.

My bowels had potential this morning. Unfortunately the toilet reports they didn't come through.

Indeed. Unless a similar-sized property on the same street has sold for £250K, the potential isn't there.

Journeywoman

Yes that's what I'm basing it on - other properties in the area that are done up - but of course above poster is right 'potential' isn't a definitive thing, we're not in any delusion about that

There is provision for an extension, so extra bedrooms - one of the big deciding factors in property value. Offset against the costs however, depends, but we are able to save on most of the labour costs.

I guess our first step is to go and view the place............

kingstreet

Speak to an independent broker about the renovation mortgage options open to you.

Journeywoman

I have heard of renovation mortgage but don't know anything about them - how does it work?

Doozergirl

Don't let the naysayers put you off. They don't know that you don't know either

We did it so many times. Small, detached house on a great plot made into a bigger one. Even without comparables on the street. Rebels that we are.

sparky130a

Doozergirl wrote: »

Don't let the naysayers put you off. They don't know that you don't know either

We did it so many times. Small, detached house on a great plot made into a bigger one. Even without comparables on the street. Rebels that we are.

I actually agree with you to an extent.

However doubling a properties value at the first attempt? That's rare. And very risky.

If it wasn't every man and an untrained chimp would be doing it.