Is it worth buying a fixer upper

Zambonis

This is my first post so apologies if this is the wrong forum.
A few months a ago we saw a small 2 bed house listed in a desirable neighbourhood not far from us. The house is quite cheap but needs a LOT of work, we had expected it to sit on the market for a while but it was listed as "under offer" a few weeks ago before we had a chance to view it. Suddenly it is back listed as available- we are waiting to hear from agent about why, but would suspect the amount of work needed. 
The house is a two bed cottage in a conservation and needs a complete modernisation including gas central heating(!)(though it does appear to have double glazing. From the photos it looks pristine as if no one has lived there since 1981!  We have viewed a few similar houses in the neighbourhood that have been done up (with small kitchen extensions) so I know this house could be great with some work ...but my partner is hesitant (I am the handy one not him). For context, the max selling price for similar houses in the area appears to be around £530 000.
Our budget was originally £400 000 (for a move-in now flat) or less if we need to do work up to the amount of around £400 000ish; but the idea of being able to buy a small house instead of a flat is indeed appealing.
Is the work that would be needed worth it? We are not even sure how to go about getting a builder/contractor to provide an actual quote on what it would cost to do the work and it seems unhelpful to rely on online sites as guides, especially in London where costs can vary wildly.
Any advice?

eddddy

In 'nice' areas of London and the home counties, there has often been a tendency to 'overpay' for 'fixer uppers' - because people want the opportunity to to choose their kitchen, their bathroom, wall finishes, flooring etc.

i.e. It can work out more expensive overall to buy a 'fixer upper' and pay for the refurb - than just buying a house that's already 'fixed up' (but maybe not to your taste).

But the market is a bit unusual at the moment, and I guess there will be exceptions - so maybe you've found a good deal.

Zambonis

I guess that is indeed what we are afraid of, that we pay more than is possible to recover later... especially in this market!

Angela_D_3

Zambonis said:

I guess that is indeed what we are afraid of, that we pay more than is possible to recover later... especially in this market!

That’s a given anyway.   Kitchens etc don’t last long these days anyway.  I’d be getting one you can love with for 10 years and replace it when you’ve saved up 

tacpot12

Personal recommendations are the best way to find a good builder. As clients, you would need to educate yourselves as to what you want done. If you can be clear what you want, the builder can give a reasonable estimate.

You will probably need a full structural survey done before you buy the property, and if this turns up any particular problems you may need a specialist survey - I bought a cottage many years ago where the surveyor spotted a bow to an outside wall - this needed a structural engineer to review the extent of the issue and propose remediation options. With the survey(s), you can ask the builder to quote to fix the issues identified therein, and add any other bits you want. Kitchen installation is quite easy to do yourself except for the counter-tops (and the plumbing and electrics). It is worth employing a kitchen fitter or joiner (or a specialist company if you are having granite) for the counter-tops.

Most people can't afford to buy fixer-uppers because they need all their savings for a deposit, and don't have the spare money to spend on the renovation. My guess is that you will need £40-50K in London to overhaul a property that has not been occupied since 1981 if you are paying builders/plumbers/electricians/kitchen fitters. The main risk is water-ingress that has not been found yet - have a really good look around the loft and any cellar, and check the chimney breasts are intact and the chimneys are capped. 

Zambonis

tacpot12 said:

Personal recommendations are the best way to find a good builder. As clients, you would need to educate yourselves as to what you want done. If you can be clear what you want, the builder can give a reasonable estimate.

You will probably need a full structural survey done before you buy the property, and if this turns up any particular problems you may need a specialist survey - I bought a cottage many years ago where the surveyor spotted a bow to an outside wall - this needed a structural engineer to review the extent of the issue and propose remediation options. With the survey(s), you can ask the builder to quote to fix the issues identified therein, and add any other bits you want. Kitchen installation is quite easy to do yourself except for the counter-tops (and the plumbing and electrics). It is worth employing a kitchen fitter or joiner (or a specialist company if you are having granite) for the counter-tops.

Most people can't afford to buy fixer-uppers because they need all their savings for a deposit, and don't have the spare money to spend on the renovation. My guess is that you will need £40-50K in London to overhaul a property that has not been occupied since 1981 if you are paying builders/plumbers/electricians/kitchen fitters. The main risk is water-ingress that has not been found yet - have a really good look around the loft and any cellar, and check the chimney breasts are intact and the chimneys are capped. 

We are in a lucky position that we have a larger than usual deposit so potentially have 20-30k that we put aside as were sure we would need to do work on many flats we have seen anyway. But obviously 50k (or more) is a different story so would need to be in a position to negotiate the price down.  The EA may have already put it as low as they are willing to go in spite of the work needed.
The general area is a real mixed bag in terms of trends, I have seen lots of prices being lowered significantly (10-20k within a month) but others are selling surprisingly fast for what they are.  

Thanks to everyone to has offered advice. We don't have a lot of friends who own their homes so it is difficult to otherwise get a good idea of how such things go down in real life. 

ProDave

Depending how much you are prepared to slum it, you can just move in as it is, and do the work at your own pace as you can afford it.

Davesnave

ProDave said:

Depending how much you are prepared to slum it, you can just move in as it is, and do the work at your own pace as you can afford it.

That's what my DD did at a much more reasonable price level in a highly desirable part of another major city.

On the one hand she's gained because prices in the neighbourhood have risen faster than her income, but on the other, because it's a small house and kids have come along, the incentive and time to get it beyond liveable probably isn't there.

bouicca21

What Edddy says about people paying a premium for doer uppers in London was certainly my experience when I was in the market 5 years ago.  That was during the London bubble but I think it’s still likely to be true.

Zambonis

ProDave said:

Depending how much you are prepared to slum it, you can just move in as it is, and do the work at your own pace as you can afford it.

But no central heating... Something would need to be done about that at a minimum. 

Davesnave

Zambonis said:

ProDave said:

Depending how much you are prepared to slum it, you can just move in as it is, and do the work at your own pace as you can afford it.

But no central heating... Something would need to be done about that at a minimum. 

It depends on your personal tolerances and comfort zone.

When I bought my first house as a single person, there was a hot water system, but that's where such creature comforts ended. As a healthy 28 year old used to heating rented places with paraffin stoves, having a gas fire was luxury!

Similarly, 40 years on, to get the property we bought  up to scratch, we had to renovate over 3 years and cope with huge holes in the walls and missing ceilings at all times of the year, again with no central heating. It was either that or we could have purchased something well up-together and boring that didn't have acres of land.

Healthy people have choices and roughing it a bit can be fun, provided one has the time and residual energy to cope with the extra demands of building/renovating and just enough money to see it through.