Mortgage valuation survey- are we paying more than the properties worth?

Bigphil1474

Our old house had wiring from the 80's. Electrician replaced consumer unit and was happy wiring was okay. Surveys tend to err on the side of caution. It is unlikely to say rewire required. Might just be a few hundred quids worth of work.
The problem with spending £150k doing up a property to your tastes is that £100k of it might not be to anyone else's taste. If it cost that to make it into a modern blank canvass, then maybe so. The value you are adding is to you. If you want the property to be a good investment rather than a home, then you need to renovate it for the market and not for yourself. Personally, if you are comfortable with the finances, I wouldn't worry about what it will be worth in 5 years. If it hasn't exceeded what you've spent, then you might have to stay there longer.

silvercar

Speak to the surveyor and ask if he think it will be worth more than £630k once you’ve done the work. If you aren’t going to make a profit from doing all the work with the hassle and cost risk of doing it, you may as well buy somewhere where the work is done.

Elliott.T123

Naiverenovators said:

@Albermarle yes this would be with an extension. We had a verbal chat with our surveyor after to discuss the findings and she said the fuse box was old and likely to fail and electrical test. With the age of the house it would need rewiring. As for the boiler he was able to confirm it being serviced last year but said it was over 20 years old so will need replacing at some point. 

Thanks for everyone’s help. I think we’ll take the gamble based on what we know so far. We’d love to buy a house already done up but most properties of a similar size in our town are around 600-650k and would still require changing of the bathroom and kitchen to get it to our taste. It’s money we just don’t have to spend for things like that if we’re purchasing at a higher purchase price so this has ended up being our compromise. 

Ultimately you could use that argument about virtually everything though. House has a 2 year old boiler, that's going to need replacing at some point.

For all you know the boiler may carry on just fine for another 10 years.

ReadySteadyPop

sheramber said:

What you could sell it for after renovating will depend on the market forces at the time. 

Nobody can foresee that. 

New kitchen, new  bathroom and redecoration may make it more sellable but will not necessarily increase the value by the cost.
 

A buyer may not like your choices. 

Buying at today`s prices with interest rates shifting back to more normal historical levels could be a recipe for a big loss.

Herzlos

I wouldn't focus too hard on the value after, because you're presumably looking for somewhere to live rather than an investment. 

I would say that most renovation work is probably going to gain you less than it costs. For example I spent £15k on an extension that added £5k to the house value. Was it a bad deal? Not really, I got use of the extra room for a few years and it made it easier to sell. 

Is the house worth the total asking + renovation price to you?

Albermarle

Herzlos said:

I wouldn't focus too hard on the value after, because you're presumably looking for somewhere to live rather than an investment. 

I would say that most renovation work is probably going to gain you less than it costs. For example I spent £15k on an extension that added £5k to the house value. Was it a bad deal? Not really, I got use of the extra room for a few years and it made it easier to sell. 

Is the house worth the total asking + renovation price to you?

But on Homes under the Hammer, it nearly always brings a big gain !

Herzlos

Yeah that's the landlord/flipper special. Bodge in the cheapest kitchen set you can find using DIY or dodgy trade mates and hope it holds together long enough to get paid. 

If you're paying professionals to do any of the work, the cost will increase dramatically. 

ReadySteadyPop

Albermarle said:

Herzlos said:

I wouldn't focus too hard on the value after, because you're presumably looking for somewhere to live rather than an investment. 

I would say that most renovation work is probably going to gain you less than it costs. For example I spent £15k on an extension that added £5k to the house value. Was it a bad deal? Not really, I got use of the extra room for a few years and it made it easier to sell. 

Is the house worth the total asking + renovation price to you?

But on Homes under the Hammer, it nearly always brings a big gain !

Those are old shows?