Want a discount on a home? Go for a major ‘fixer upper’
Homes that require major structural work can be bought for £40,000 less than the market average, according to Direct Line Home Insurance.
It found that ‘fixer uppers’ (houses needing major works) can be purchased for around 17% less than average.
In comparison, houses requiring only minor structural fixes can be purchased for £13,500 (6%) less than the market average for the property.
In other words, properties in need of work can provide a more affordable way onto the housing ladder, or a way to flip a property and still make a profit. Estate agents highlight there is still money to be made in flipping properties, with 62% believing buyers can capitalise on price reductions if renovations are required and make a profit even if a house requires structural work.
How can you add value?
When planning to add value to a property, research shows homeowners can boost the resale price by £9,980 on average by redecorating every room. The best single room to renovate is the kitchen, which alone can add £9,275 to the value of the property. Renovating the bathroom on a property can add £7,532 to its value.
Jeremy Bristow, head of home insurance at Direct Line, said: “Fixer uppers are still a good option for first time buyers and there is still money to be made for those looking for a challenge by renovating a property. However, homeowners should keep the costs of major work in mind and ensure they are not taking on too much work.
“Householders who are planning home renovations should let their insurer know about any changes being made to their house. Any work that involves walls being knocked down, floors being taken up or electrics changed, can result in damage to the property. Having scaffolding erected and builders coming and going with spare keys also increases the security risk.”