Previously, buyers could expect to be quoted the same, much-repeated piece of advice: buy the worst house on the best street. But since Brexit, which has led to a shortage of skilled workers, and the pandemic, which caused supply chain disruptions, the cost of construction work has soared. Increasingly, buyers began to favour turnkey properties.
Construction costs are still 15 to 20 per cent higher than they were in 2020, says UK Finance, and nor are prices coming down. Building Cost Information Service (BCIS) estimates that building costs will increase by a further 15 per cent over the next five years, while tender prices —those agreed between the client and contractor when they ‘commit to construct’— will go up by 20 per cent.
Even so, there are signs that the appetite for fixer-uppers is beginning to return. According to new survey data from Rightmove, 68% of renters see fixer-uppers as a more affordable route to property ownership. Nationally, buying a home in need of renovation work can knock an average of £44,634 (12 per cent) off the asking price.
But if you are considering buying a fixer-upper, you’ll want to think carefully about where you buy. Rightmove found that there are only four London boroughs in which it is actually cheaper to buy a fixer-upper: Enfield, Harrow, Bexley and Brent.
Enfield
Enfield is the best location for London buyers to purchase a fixer-upper, according to Rightmove’s data. Buyers can expect to pay 20% less — £102,527— for a house that needs work, with the average fixer-upper costing £399,086. The average house price in Enfield, on the other hand, is £501,613.
Harrow
In this northwest London borough, a fixer-upper can also give buyers a significant saving. A fixer-upper in Harrow costs £109,550 less than the average property (£629,808), representing a 17 per cent discount.
Bexley
In Bexley, a property requiring repairs will cost £423,558 on average, compared with the average asking price of £487,870. For buyers, this is a 13 per cent discount, and a saving of £64,312.
Brent
Like its neighbour Harrow, fixer-uppers are cheaper in Brent. The average price for a fixer-upper is £559,125: £47,056 less than the average asking price of £606,181. This represents a saving of 8 per cent.
Unsurprisingly, Rightmove’s survey of 34,000 home-movers also found that buyers are more open to taking on renovation work in areas where property prices are higher, like London and the southeast. Demand for fixer-uppers was particularly high amongst renters, 68 per cent of whom saw them as a more affordable means of getting on the property ladder. Rents have increased by 61 per cent nationally over the past decade, forcing many renters to consider alternative routes to home ownership.
Amongst both renters and homeowners, other key motivations for taking on improvement work were the ability to create the perfect home, adding value to a property and improving its energy efficiency in order to make future savings. According to Rightmove, a three-bedroom semi-detached house with an EPC rating of C would save £2,666 on its energy bill, compared to the same house with a rating of F.
"Tackling a renovation project could be a more affordable way to get on the ladder and to make a space your own,” says Rightmove’s Tim Bannister. “While they do require time and planning, many find the process worthwhile, as it can offer both financial benefits and the satisfaction of creating a home that truly fits their needs.”
