Home News Renovations Could Be Worth the Cost for Sellers of Older U.K. Homes

Renovations Could Be Worth the Cost for Sellers of Older U.K. Homes

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Inflation and supply chain issues are pushing up labor and material costs, making home renovation projects in the UK more difficult than ever. Few buyers are willing to overcome that challenge, so older luxury home sellers should consider remodeling before listing their property to avoid selling at significant discounts.

“The combination of Brexit and a pandemic makes the costs and time associated with refurbishment increasingly difficult,” said Mark Pollack, owner of London-based brokerage firm Aston Chase. “What we saw was resistance to the refurbishment project.”

Prices for wood, glass and other materials rose by about 20% to 25% last year, according to Pollack. Labor costs increased by a similar amount as many construction workers left the UK after Brexit and the country struggled to produce new ones, Pollack said.

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“It’s a big price increase in a short period of time,” he said.

The cost is so high that buyers are negotiating a significant discount on the fixer upper property.

“If someone buys a home that needs to spend £ 50,000 ($ 59,482), they probably want it at a price that’s about £ 75,000 cheaper than the cost of an equivalent home if it’s over.” Said the founder of Jonathan Roland. The National Association of Property Buyers, a Worthing-based non-profit organization in West Sussex, is focused on improving standards in the real estate purchasing sector.

Rule of thumb: Expect to sell at a discount of about 50% in addition to a discount equal to the cost of the remodeling. This includes the “profit” that buyers can expect from the hassle of remodeling.

On the contrary, renovation helps to add enormous value to a property. The pandemic-fueled “competition for space” has made basement expansion or loft expansion more popular among buyers.

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Pollack recently worked on selling a 5,628-square-foot home in St. John’s Wood, London, where the owner spent three years refurbishing. The refurbishment included the creation of an archaeological basement with additional bedrooms, movie and game rooms, and a split-level gym space.

The owner’s “labor of love” was rewarded, Mr. Pollack said. The property was sold for nearly £ 10m (US $ 12.03 million) as offered.

Loft expansion is also a way to add additional floors to a property, typically costing £ 15,000 to £ 60,000.

However, those considering refurbishment should have enough time to complete the project prior to sale.

Andrew Grucock, a partner of Knight Frank based in London, said:

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The decision to refurbish depends on several factors, he said, among which the market the seller is trying to target.

For example, overseas buyers tend to look for new or newly refurbished properties.

“They don’t have a network to do major refurbishments, and they just don’t tend to do that,” he said.

He recently advised sellers with a portfolio of properties to remodel and sell each home individually. The seller was able to renovate all the properties at the same time, saving on flooring, painting and decoration costs.

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“That meant we were able to get a premium price of less than 1% of the asking price,” Groocock said. For the buyer, the benefits were clear. “As a buyer, that means you can roll those costs into a mortgage because of the fact that someone else has done the job. After buying real estate, cash to get it done. You don’t have to have it. “

Refurbished properties may also attract more buyers.

Martin Bikit, Managing Director of Berkshire Hathaway Home Services in London, said:

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Weigh the costs and benefits of refurbishment

According to Bicht, sellers need to carefully consider home remodeling. Rising material and labor costs can also be a risk to them.

“There is no guarantee that you will get your money back,” Bikhit added. “After all, the buyer is in control of the situation. It will probably sell faster, but it could be a break-even point.”

Those who decide on refurbishment need to make sure that their improvements cover a wide range of markets.

“Sellers who decide to renovate their home before selling make the mistake of remodeling their home the way they want it, rather than thinking about who to sell to,” Bikhit said. “The types of refurbishments they make need to match what the market was looking for at the time, in terms of trends and fashion styles.”

Bikhit has seen many examples of sellers embarking on major home renovations, but a few months later they asked buyers to redo their kitchens and bathrooms.

“Sometimes it can be counterproductive,” he said.

Staging: It costs less than refurbishment and is a big achievement

For those who don’t have the money or time to spend on renovations, there are still easy ways to make old properties more attractive to the market.

Groocock recommends that sellers invest in companies to help staging real estate and help buyers understand how to maximize the various spaces in their homes. For example, the fourth bedroom can be restyled as a study or library.

“It makes your home look much more versatile,” he said.

Similarly, all sellers need to focus on the charm of the basic curb of the house.

“When selling real estate, we need to make sure that potential buyers can dispute before going through the door,” Groocock said. “Is your vestibule tidy? Is the front door painted? Does it look smart from the outside? It’s these very small things that matter, because people make instant decisions. Because. “

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Small home renovations, such as removing old wallpaper or cleaning gutters, can add tremendous value beyond the amount spent, Rolande said. I am.

“If you have a small problem that looks worse than that, sort it out,” he said. “Potentially you only earn 10 or 20 times what you would spend, so somehow find the money.”

Whether it’s a major refurbishment or just a minor repair, the house presented in the best light will definitely get a higher price.

“Basically, there is only one chance to bring a property to market,” Groocock said. “The first impression is important.”

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