Buying an older property can be an attractive proposition, with solid construction and period features often found in these homes. However, renovations and repairs are usually required, which can quickly escalate costs if they are not properly budgeted for. Follow these tips when budgeting for renovations on an older home purchase.
Do Your Research
When viewing older properties, don’t just focus on the aesthetics and asking price. Take time to thoroughly inspect the property and make notes on anything that looks worn, damaged, or in need of replacement. Check the state of the roof, plumbing, electrics, heating system, windows, exterior brickwork, and anything structural. Research the typical lifespan of these elements to gauge what may need renovation soon.
Get a Professional Property Survey
Arrange for a survey carried out by an RICS surveyor before making an offer on an older home. This will highlight any issues or needed repairs, providing cost estimates. While pricier than basic mortgage valuation surveys, they can save you from nasty surprises later. Use the findings to inform your renovation budget and negotiate on price if costly issues are revealed. Contact RICS Accredited Surveyors in Norwich for more information.
Factor in a Contingency Fund
It’s impossible for even the most thorough inspection to uncover every potential repair needed in an old home. Once you start renovations, additional problems often emerge. Include a contingency fund of 10-15% of your renovation budget for unexpected issues. This covers you for any surprises during the project without blowing the budget.
Research Local Construction Costs
Construction and trade costs can vary hugely across different regions. Research average costs in your target area before budgeting. Get multiple quotes from local tradespeople to gauge price ranges for jobs like replumbing, rewiring, plastering, tiling, floor sanding, kitchen/bathroom installation, etc. Prepare for higher costs in more rural or remote locations.
Allow for Any Specialist Works
Some old homes may require specialized renovation works like damp-proofing, timber treatment, lead pipe replacement, chimney repairs, or asbestos removal. These tradespeople tend to charge higher rates. Make provisions in your budget if such works are likely needed.
Factor In VAT Costs
Most renovations, repairs, and construction work are subject to 20% VAT on top of the basic costs. Remember to include VAT in your budgeting to avoid shortfalls. VAT relief schemes are available in some circumstances, so get professional advice.
Include Contingencies for Planning Permission/Approvals
If you will be doing extensive renovations on a period property, planning permission or listed building consent may be required, especially if in a conservation area. There are fees involved in the application process. Build these contingencies into your budget, along with project delays from waiting for approval.
By following these budgeting tips when buying an older property, you can establish a realistic budget for all likely renovation and repair costs. This allows you to proceed with your purchase and project with confidence. Adjust the figures to suit your property’s specifics, get professional help where needed, and ensure your older home renovation goes smoothly without blowing the budget.
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