Guidance on purchasing a house 'with potential'; renovation, project, financing

Spatton

Based on personal experience:

A) Your order is illogical - you need to do the messy / critical infrastructure stuff first, so boiler, insulation, electrics, pipework
Get the electrics checked and it's probably worth an enhanced survey to make sure there's no nasties like damp or a dodgy roof.
C) Your costs and timescales are very optimistic - double your budget and your timescales and be prepared to work very hard and you might be close - old houses that haven't been maintained are money pits and you will find all sorts of stuff that needs sorting - possibly even asbestos given the age of the house (I hope not, but it's a possibility)
D) If you have an architect manage them closely - they can go off on design flights of fancy and forget sensible things like storage space and where light switches ought to be for everyday use - seriously.
E) We did agree a mortgage on this basis, but only because I was able to demonstrate extensive experience of project management in a commercial setting (I've overseen the construction/refit of commercial premises but in an industrial context) so the lender knew that I knew what we were taking on.  If you can persuade the lender to lend on this project, your ultimate mortgage will not include the cosmetic stuff you've prioritised, and is probably unlikely to accommodate an extension unless you can afford a bigger % deposit, and you may well have less favourable interest rates because it's a bigger risk.  The bank doesn't care if it's an investment - it's not as if you're going to give the bank extra money because the house appreciated in value, hence the unwillingness to lend on the decor / extension. 

Unless you're doing the work yourself, be aware that managing trades and their co-ordination is a full time job in itself, and there will be unforeseen delays and unforeseen costs.  Finally, this type of thing can take a huge toll on your personal life.  Living in a stripped back house while you do extensive renovations loses its appeal very quickly....  

But, it's your money, and if you've completely fallen in love with the place and are prepared to experience a really, really steep learning curve it's certainly going to be a life experience.  If your motivation is to flip it for a quick buck, then there are probably better properties out there to practice with if you have no DIY skills or experience with this type of property / project.  

benson1980

I'm not convinced with the double your budget argument, for a house under 90 sq metres. 6k for bathroom is more than reasonable, as is the budget for kitchen. 8k worst case scenario for central heating. I actually think you could bring the costs down; we're redoing one of our bathrooms at the moment and that's going to be 5k, possibly a bit less, with mid range stuff, double vanity units, porcelain tiles, karndean flooring and the whole room reboarded and skimmed. 

If it's a house you intend to live in for a while the best advice I can give is just take your time and do it room by room, rather than rushing it and letting it completely consume your life- once you've got any of the integral bits done such as CH/rewiring, if it needs it.

Booksandplants

It’s possibly one of the hardest times to start a self renovation.  All the decent builders are booked up months in advance, the costs of materials is increasing, supply is difficult and so on.  My husband is a builder and we have renovated several properties.  We have just replaced a small conservatory with a proper room - to building regs and tbh its the warmest room in the house. It cost, without labour and with cost price materials about £17k.  

However, cost of all this aside, have you asked yourselves the most important question - do we really want to spend all our time and money on this property.  Do you have other interests as these will be put on the back burner for some time?  Would you be able to access the funds to complete the works in a timely manner?  Do you know any tradesmen?  Do you have any idea how much a bricklayer can earn building new houses?  It’s a constant stream of money disappearing out of your pockets.

I am trying to put a different perspective on this house renovating malarkey for you.  It sounds good but if all you can reasonably do yourself is decorate, you are at the mercy of a lot of other people.

Don’t forget, any work carried out to the house will need building regs approval and certification.

Lenders are also increasing their stress tests on lending so be prepared for that.

Good luck and enjoy your journey!!

powerspowers

Hi @dearface did you make a decision? 

House buying last year, my partner and I were tempted by a few reno projects but found that they got snapped up really quickly. Living near them now I suspect it was professionals rather than diyers. It’s still a dream of ours but need more money behind us and felt the sacrifice on family time to much at this point in our lives. 

Consider “I am looking for a project house with x budget for Reno” vs “I am looking for a house and I think this one has the potential but needs a lot of work”- which one are you?  

Good luck with the house buying! 

danrv

Spatton said:

possibly even asbestos given the age of the house (I hope not, but it's a possibility)

Yes, I’d say a high possibility. In ceiling Artex, insulation and Thermoplastic floor tiles. 
I’m currently doing my living room skirting boards and have had to remove some small sections of tile.
It’s about 1% content and sealed in the material but I use a water spray anyway.

dearface

Thanks for everyone’s responses.

I’m getting a real mix of responses, though the majority are pointing towards budgets not being realistic (too low) and questioning whether it’s really all worth it.

I’m in two minds about it at the moment. We do have money and no serious commitments (eg no kids living with us), and we are able to tolerate living in a house which needs work. We understand it’s a multi-year project (thanks to feedback, including from this forum). Of course there is the fear of the unknown, what else the house would need that Ive not identified yet. So this becoming a money-pit does make me a bit hesitant. We’re also new to the area/region so we don’t have mates of a mate who could, so there’s a cost and timing risk there too.

But this is also a future family home for us. We’re not in it for the short term. I envisage this could be our family home for 20+ years, and I’m recognising that this will be a multi-year project. The housing market in our area is a bit crazy atm (prob similar across the country); increase of prices of 10%+ in the last 3 months alone, interest rates increasing steadily, any houses renovated sold for 10-20% over asking price after bidding wars. It’s a catch 22.  I think one commentator above said it’s the worst time to renovate and get trades in, well it’s also a pretty bad time to buy a house.

FreeBear

dearface said: I think one commentator above said it’s the worst time to renovate and get trades in, well it’s also a pretty bad time to buy a house.

It is a good time to learn DIY - Much of the work that needs doing around a house doesn't need a huge amount of skill as long as you don't try to rush a job.

benson1980

dearface said:

Thanks for everyone’s responses.

I’m getting a real mix of responses, though the majority are pointing towards budgets not being realistic (too low) and questioning whether it’s really all worth it.

I’m in two minds about it at the moment. We do have money and no serious commitments (eg no kids living with us), and we are able to tolerate living in a house which needs work. We understand it’s a multi-year project (thanks to feedback, including from this forum). Of course there is the fear of the unknown, what else the house would need that Ive not identified yet. So this becoming a money-pit does make me a bit hesitant. We’re also new to the area/region so we don’t have mates of a mate who could, so there’s a cost and timing risk there too.

But this is also a future family home for us. We’re not in it for the short term. I envisage this could be our family home for 20+ years, and I’m recognising that this will be a multi-year project. The housing market in our area is a bit crazy atm (prob similar across the country); increase of prices of 10%+ in the last 3 months alone, interest rates increasing steadily, any houses renovated sold for 10-20% over asking price after bidding wars. It’s a catch 22.  I think one commentator above said it’s the worst time to renovate and get trades in, well it’s also a pretty bad time to buy a house.

It is just the extension as said I'd be a bit careful about, but you have obviously purveyed the local market. The other thing is, quite often the best houses, in the best positions and good plots, need work doing to them. They put a lot of people off straight away, so you have less competition in a sellers market, and there's generally wriggle room in the price. I actually prefer houses like that, that are priced accordingly, as then you can do them up to the standard that you want and are more honest than houses where the owners think they've done them up but the quality of renovation is actually really poor. If you then also don't want a new build, your market is quite often limited.

One poster said 200k and you quite reasonably [I thought] asked them for a breakdown- I cannot see how your projected work that you believe needs doing will be close to this unless there are real complications with the extension, or fabric of the house. Or, you are literally putting top spec finishes everywhere. Your survey should pick up any major issues and you've obviously viewed the place and you don't have to be a master builder to figure out if the house is generally in ok shape. Your figures are realistic if the fabric of the house is ok- roof, windows, brickwork etc. and dependent on relatively basic but decent level finishes. 

I thought the asbestos was a good shout as that would concern me a little bit, but again depends if you need to remove what's there, such as thermoplastic tiles etc. Learning DIY definitely has it's advantages as well- not only the money but you can set your own pace, you don't have to worry about dealing with trades, learning new skills. Handily enough plasterers are the one trade I've never struggled to get in but have needed to, and at relatively short notice.

andyf1980

Some interesting thoughts here too. 

We have thought a bit about extending but thinking more about converting the garage to another bedroom as it may be cheaper than a whole new room and I reckon will add value. 

dean350

A 50's house is going to be solidly built, will likely have a decent sized garden, no hassles with shared driveways and is likely to be in a more central area. It may well have had the classic late 70's/ early 80's refit with the addition of central heating and double glazing. If you cant afford the finished article then this type of reno is a good option - and you get exactly what you want at the end. Personally if you like the location and setting then go for it and deal with the rest later. Don't forget the place is habitable as it is. Before purchase try and find out whether a rewire is required. A new combi boiler will free up space in the airing cupboard and loft as well as lower your bills. Existing rads could possibly be cleaned out and reused. If there are just two of you you could use a bedroom as a temporary living room. Consider leaving the expensive extension for much later and put in a cheap B+Q kitchen with vinyl flooring for now. Also, if the wallpaper is plain and in good condition it can be painted over. Repainting skirting, doors and frames just lifts a place hugely as well. You will have to fund from savings/wages/new loans as mortgage companies wont lend the extra. I have just done all this. Carpets were 3K fitted, curtains and blinds are the one to watch as they were 4K new throughout - 50's places have big windows.  KItchen units were about 2K. Remember that the sky is the limit when it comes to internal fixtures and finishes and so cut your cloth accordingly.