Is your potential property habitable?
If you’ve got your heart set on a big renovation, it’s important you consider the existing state of the building. Properties that are deemed not habitable will have significantly fewer finance options than other ready to live in homes.
If your potential investment is…
- Derelict
- In need of a conversion
- Lacks a working kitchen or bathroom
Then you’ll find a majority of high street lenders will be reluctant to offer you a traditional mortgage. In order to finance your project, you’ll likely need to reach out to a specialist who has experience in renovation mortgages or self-build financing.
Make sure your renovation is adding value
Homes are primarily places for us to live in and enjoy, but that doesn’t mean you should neglect the investment aspect. After all, renovations can be very costly projects and one way to ease this financial pressure is by knowing the work you’re carrying out will pay off in the future.
If you want to increase the price of your home, these are the best projects to consider...
- Extensions
- Loft conversions
- Kitchen renovation
- Adding a new bathroom
- Adding a new bedroom
- Creating an ensuite
Of course, the housing market isn’t set in stone and there are plenty of factors that go into creating home value. The quality of your end results will be a big factor in the value you create, likewise, you’ll need to balance out the exchange you may have made in the process. A rear extension can add a lot of value, however, if you’ve lost a significant amount of green space in an area where gardens are highly sought after, then you may have lost more worth than you’ve gained.
For more information, see our guide to adding value.
Addition bathrooms like this loft ensuite can add value to your property. Project by Team Resi.
Are you renting, inhabiting, or flipping?
It’s worth bearing in mind that not all renovations are the same, as there can be different motivations for taking on certain projects. Some people will be renovating to create the perfect home for their family, others will be trying to turn a profit, and others will be designing with tenants in mind. Which route you’re going down will ultimately affect not just the work you’ll be carrying out but the budget you’ll require.
Inhabiting: if you plan on living in your property for a long time to come, there will be more long-term financing strategies you can employ and you should also be able to make sure of your home’s future value. In some cases, it might be worthwhile using a short-term loan upfront before opting to remortgage after the work is complete.
Flipping: if you plan on selling your home once the project is complete, then your financial strategy should be based on what profit you intend to make. This profit could then allow you to pay off your loan quickly, meaning you avoid the need for a lengthy and high-interest repayment plan.
Renting: Having tenants move in? While finding finance should be similar to whoever you choose to stay in the property, there will be some extra costs you’ll need to bear in mind. Regulation around rental properties is different to a normal household, so you’ll not only need to budget meeting standard building regulation, but you’ll also need to find funds for these other requirements too, such mould prevention and fire safety.
Know what you’re dealing with
Our number one renovation tip? Don’t go into your purchase blind.
Many of the most expensive repairs you’ll need to make won’t be visible to the naked eye. Therefore, we highly recommend that you get a surveyor on board who’ll be able to properly map out all the renovations you’ll need to cover in the future.
Common concerns you might miss during a viewing include…
- Roof damage
- Faulty electricals
- Poor plumbing
- Structural damage
These issues can cause massive headaches for a homeowner down the line and can be very expensive to rectify. The last thing you want is to tie yourself down to a property you can’t afford to repair.
Get tailored advice for your project
Every project and home is different. Therefore, if you’re looking for advice on a potential new home or undertaking renovation, it always helps to speak to an expert.
Luckily, at Resi, we have both architectural and financial expertise all under one roof. To speak to a member of our team, simply book yourself a free no obligation consultation here.
Please note:
- You may have to pay an early repayment charge to your existing lender if you remortgage.
- Your home may be repossessed if you do not keep up repayments on your mortgage.
- There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £495.
