Tips Review

Property Renovations

Here, whatever you do, never take an estate agent’s word that a place on the market you may be interested in buying needs ‘cosmetic work only’. They will minimize the cost and extent of renovation in order to sell the place. It is only when the property is utterly beyond habitation that they will say the place needs ‘total renovation’.

Also, never take their word for it that a place can ‘easily’ be enlarged or extended. I was attracted to the two-bedroom maisonette because the agent’s blurb indicated that planning permission to turn the garage into a third bedroom would be ‘easy’ to obtain. By calling the council, I established that such permission was unlikely to be granted. Other less cynical buyers might have imagined from the details that planning permission had already been granted, as that is what potential buyers were led to believe. However, I know from bitter expe­rience that planning permission is never a foregone conclusion and you buy something without it at your peril.

Getting expert advice

If interested in a property that has seen better days, you can either have a survey done or call in a builder friend to give it the once­over. My own view of surveys is that they are largely a waste of money. Yes, I know they are advised in all other property books, so why don’t I recommend them?

Because the surveyor wishes to earn his $150-plus an hour, he will prepare a long report detailing all the property’s many defects. However, this does not necessarily give you an idea of what it might cost to put the problem right or if some problems can be safely ignored while others need urgent attention.

When, once, a party wall survey had to be carried out on my property, I was amazed to find every crack and wonky wall care­fully detailed on the report. My house appeared to be in imminent danger of falling down, which wasn’t the case, but, as the surveyor had charged my neighbours several thousand pounds for this report, it was going to be thorough.

Another neighbour paid a lot of money for a full structural survey when she moved into her house. The survey did not uncover the fact that the house was suffering from subsidence so severe that she had to move out for two years while the house was gutted and underpinned, then put back together at a cost of $150,000. It was two years before work even started as the insurance company argued that the surveyor had given the house a good bill of health and, therefore, it was a case of caveat emptor. Eventually the ombudsman had to adjudicate and he found in favour of the buyer, but it was touch and go. In the meantime, the house was valued at zero — and this was a half-million pound property.

A far better idea, to my mind, is to call in a builder friend, if you have one, or maybe a friend who has carried out renovations recently to have a look at the property before you buy or even make an offer. In any case, I would get a rough estimate of the price of any job you are likely to undertake, then discover whether or not the improvements you are planning will actually add value.

Check how much work is required

If you decide to go ahead with your purchase, the next thing to decide is whether the job can be done by a handyman or needs a full team of architect, project manager, designer, engineer and array of skilled tradesmen, all of whom rack up the cost alarmingly.

Another factor to consider is your timescale. Bear in mind that the fewer workers you employ, the longer the job is likely to take.

There is also the question of how much, if any, of the work you prepared to undertake yourself, remembering that, for any successful renovation project, you have to throw either time or money at the task – preferably both. If there is one point all the makeover programmes and their accompanying tie-in books agree on, it is that there is nothing worse or more offputting than unfinished, amateur or botched DIY jobs. Unless you know for sure that you can do the job as well as a skilled tradesman, it is better left to the experts – people who are doing it day in and day out – it could save you money in the long run.

When can work start?

Once you have bought a property, make sure that it is fully yours before you start knocking down walls. Years ago, when I was more naive about such things than now, I hired a building firm to make alterations to a house that I had just bought with my then husband. Well, we had exchanged contracts and the previous owners had moved out, but we had not quite completed.

I was at work when I received a call from the outraged owner, who relayed down the phone the fact that my builders had knocked down a wall. ‘Call your men orf!’ she ordered. When I told my work colleagues, they advised, ‘Ring her back and tell her you’ve changed your mind and you don’t want the house after all.’ It was tempting, but the matter was sorted out amicably after she calmed down.

Sometimes, sellers will give consent for work to be started before completion, but you always need a solicitor’s letter to this effect and written agreement from the seller. You will at the same time also agree to become liable for utility bills before completion.

When buying to let, however, it is often a good idea to seek permission to undertake essential works before completion of the purchase, especially if the property is already empty. Every minute and every penny counts when you are trying to make money.

Paying for it all

If in theory the project is feasible, the next thing is to decide how you will raise the funds to do it. Very few people have the entire cash sum for a complete renovation sitting in the bank, but you will need to know that, somehow, you can pay for the works in other ways.

It is very dangerous indeed – complete madness, in fact – to embark on a renovation, especially one where costs can easily spiral, without knowing for sure that you will be able to pay for it. Many clients never pay the last tranche of the builder’s money because they have run out of cash themselves.

Learn from the mistakes of the amateur developers on tele­vision, who appear to have an arbitrary ‘budget’ without costing the whole thing out carefully first. It is never made clear on the programmes how they manage to raise the extra money when they inevitably go way over budget, but that way lie sleepless nights at the very least and nasty lawsuits at the worst.

Getting quotes

Once you have a rough idea of the likely cost and extent of the job, you can then start getting in proper estimates – or quotes. Strictly speaking, an estimate is a guesstimate, whereas a quote is a firm price. In practice, though, a quote is rarely as fixed as it seems as, often, unexpected problems crop up that take more money to put right than the original quote allowed for.

Once you have obtained quotes, don’t assume that it stops there as there will almost always be decoration and furnishing costs on top. It is rare that flooring, for instance, is included in a quote for an extension, yet flooring is one of the most expensive aspects of any renovation.

When you do receive quotes, read them through very carefully to see what is included and what is left out. Before booking up any builder, talk to them very specifically about which works are included and which are not. The quote should be very specific and include a rundown of costs.

Bungalows

The 1930s was the heyday of the bungalow. In many parts of the country, you can see row upon row of dismal one-storey homes that nobody in their right minds would want to live in today.

However, bungalows now have a new use – as land. Because of tough planning restrictions on new builds and the scarcity of land, more and more people are buying bungalows with the intention of knocking them down completely and building a brand new house in their place or even several new houses. Many bungalows, although they may be horrible in themselves, are on prime plots in wonderful positions.

If a bungalow was poorly built, as a lot were, being little better than a prefabricated unit that came in kit form, there may be little sense in trying to modernize it. It may be better to demolish it and start again.

Planning permission

In theory, it should be easier to obtain planning permission for a house where there was already one standing than to build on an empty plot. However, as ever, it is vital to check with the local council as to what sort of new homes might be allowed and what restrictions there are on construction, height, size and so on. Some councils do not allow any significant increase in floor area, so you may have to build up, which would make your new home stand out from the other bungalows in the row. For this reason, some councils will require you to replace the existing bungalow with a ‘bungalow-like’ building so that it fits in with its surroundings.

Where planning permission is required, as it always will be with projects like these, neighbours might well object. One Bungalow Bill, Tony Addinall, wanted to knock down a tatty but large bungalow on a half-acre plot in Surrey and in its place build two large, detached, two-storey houses. He received outline planning permission in advance of the purchase and assumed all was fine, but, before work began, a neighbour wrote a 70-page letter to the council to express concern about the proximity of the projected new houses to his own dwelling. The council took the neighbour’s objections seriously and planning permission was refused.

Tony had not reckoned on this and had to appeal and re-appeal. By the time he eventually obtained permission, he had incurred significant expenses. Although he had originally planned to live in one of the new houses himself, he could no longer bear to contemplate living there following all the fuss.

Neighbours who have happily lived in their bungalows for many years often do not take kindly to an outsider wanting to knock a neighbouring bungalow down to build a much bigger, two-storey house in its place. They are even less likely to be enthusiastic about a mini-housing estate being squashed in next to them. It is prudent to discuss your plans with them and get them on side as much as possible in the planning stages.

Financing the build

When buying a bungalow or, indeed, any other property with the intention of knocking it down and starting it again, you have to make sure that all the right financial arrangements are in place. As with any self-build project, financing it may well mean that you have to have quite a lot of capital yourself. It can also be difficult to find a lender that will allow demolition. The Ecology Building Society, for instance, will not fund the replacement of already viable buildings.

Then there is the question of tax. If you leave some of the existing house in place, the project will most probably count as a restoration rather than a self-build and so will attract tax. As all self-build projects are incredibly expensive, it is vital to do all the research into planning, finance and possible neighbour objections before shelling out huge sums on the bungalow.

To give an idea of the kind of sums involved with self-build projects, here are some figures from Homebuilding and Renovation magazine.