- Nearly one in 10 (8%) renovation homeowners have bought a property that needed renovation, but in reality they couldn’t afford to do the work to it
- One in 10 (10%) renovation homeowners admitted to living on a ‘building site’ for a year or more before they started doing any work on it
- For those who persevere the payoff can be worth it, as nearly one in five (19%) have made a profit of between £25,000 - £50,000 from a successful renovation project
- On average, homeowners who have bought a property that needed renovation have saved themselves £44,0371
As house prices continue to rise many homeowners are being forced to look at alternative ways of getting on the property ladder. New research by Confused.com reveals that more than a third (35%) of homeowners who bought a property that needed renovation had to as it was the only way that could afford to buy a home.
Findings from the leading price comparison site show that despite many homeowners finding a solution to getting a foot onto the property ladder by buying a property in need of renovation, the experience of doing up a property may not be exactly what many people envisaged. In fact, for some the renovation dream failed to be a reality, with nearly one in 10 (8%) homeowners who bought a property in need of renovation admitting they couldn’t afford to do the necessary work to it.
And for others, their renovation home has turned into their own version of a building site, with one in 10 (10%) renovation homeowners saying they had to live “on site”, residing in an unfinished property for more than a year before they started doing any work on it.
So, buying a doer-upper is not to be seen an easy project either in terms of finance or time, however perseverance may pay off, as if done correctly, a great renovation can give the property value a boost. In fact, nearly one in five (19%) homeowners say the market value of their renovation properties now exceed the combined costs of buying and renovating it, giving them a profit of between £25,000 - £50,000.
The sale prices of properties that need renovation are normally much lower than the prevailing market price in that particular locality. On average, homeowners who have bought a renovation property have saved themselves £44,037 by tapping into this new property buying trend. Home renovators are paying on average £152,792 for a property that needed some work done to it, compared to the average UK house price which is valued at £196, 8292.
Perhaps then it’s not surprising to learn that almost two fifths (38%) of renovation homeowners admitted to buying a property that needed some TLC, as it saved them thousands of pounds compared to buying a home that needed no work. In fact, two-fifths (40%) of homeowners admit they would buy a property that needed renovation if it saved them money.
Therefore, it’s easy to understand the lure of buying a house in need of renovation - not only can buyers save money on the purchase price compared with a finished property, but they also allow people to put their own stamp on the property. But how much do these home improvements cost? On average, homeowners have spent £33,089 splashing the cash on doing up their properties.
While more than one in 10 (12%) homeowners have spent more than £50,000 renovating their home, with the most common things needing renovation including:
1.) The kitchen – 62%
2.) The carpets – 61%
3.) The bathroom – 61%
4.) Cosmetic decoration – 60%
Deciding to renovate a property is a big decision - and often more expensive than first anticipated – with more than two fifths (45%) of homeowners saying they spent more than intended. In fact, homeowners who renovated their property spent on average a significant £2,886 over their budget. And surprisingly, over a quarter (26%) ended up going over budget by more than £5,000.
It may then come as no surprise that nearly a quarter (22%) of these home renovators would never buy a renovation project again.
As the research shows renovation projects may not be for everyone, but for those who take on such properties they must be aware that it’s not only the renovation costs homeowners need to consider, but also the insurance implications. Therefore it’s worrying to note that more than two-fifths (41%) of homeowners who have carried out renovation work on their property have not let their insurer know.
Gareth Lane, head of home insurance at Confused.com says: “As house prices seem to be continuing to rise, it would appear that more and more people are resorting to buying properties that need renovation.
“Deciding to renovate a property is a big decision - and often more expensive than first anticipated. So it’s no surprise that nearly one in 10 (8%) homeowners couldn’t afford to do the renovation work to their property.
“However, of those that could afford make home improvements it’s worrying to note that so many haven’t let their insurers know. You should always tell your home insurer about major works that is being done to your property or if it is not in a good state of repair. Your home insurer also needs to know about home renovations that add value, such as a loft conversion, for example.
“When you have a home insurance policy you must disclose any changes that are made the property, otherwise you may be at risk of invalidating your home insurance policy or undervaluing the property and not being fully insured.”
Notes to Editors
Unless otherwise stated, all figures taken from omnibus research carried out by One Poll research on behalf of Confused.com. This was an online poll of 2,000 UK homeowners, of which 1003 have bought a property that needed renovation. The research was conducted between 21st January and 26th January 2016.
1 Almost three quarters (71%) of homeowners say the market value of their renovation properties now exceed the combined costs of buying and renovating it, giving them an average profit of £121,649
2Average UK price £196,829 minus the average price homeowners have paid for a property that needed renovation £152,792 = £44,037
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Launched in 2002, Confused.com was the UK's first price comparison site for car insurance and is one of the UK’s biggest and most popular price comparison services, generating over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include small van insurance, motorcycle insurance, car buying and selling, and car finance, as well as a number of tools designed to save drivers money on motoring.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the Financial Conduct Authority.