Research by London lettings and estate agent, Benham and Reeves, has revealed that while buying a fixer-upper may be a more cost-effective way of climbing the property ladder, the long term cost of bringing such a property up to standard is likely to see homebuyers pay more in the long run.
The research shows that: –
- With an average sold price of £358,034, unmodernised properties do present a more affordable foot on the ladder for hard pressed homebuyers struggling with the ever increasing cost of homeownership.
- In fact, they are 4.5% more affordable when compared to similar, modernised homes in the same area.
- However the task of bringing an unmodernised home up to standard is estimated to require a budget equal to 15.8% of a properties original value.
- On the average unmodernised home, that’s £56,569, meaning homebuyers will eventually fork out a total of £414,604 to get their fixer-upper up to scratch – £40,552 more than the cost of buying a modernised property outright.
- London homebuyers are likely to overspend to the greatest extent when embarking on their quest to breathe new life into an old home.
- While an unmodernised home in the capital will cost almost £32,000 less on average, the average homebuyer will spend almost £115,000 on renovating it, an overall overspend of £82,600 versus buying a modernised home to begin with.
- The average homebuyer in the East of England will eventually fork out £56,543 more renovating an unmodernised home versus the cost of buying a home already fit for family life, while in the South East this overspend averages £44,440.
- Even in the North East where the cost of renovating a fixer-upper is at its lowest, an unmodernised home will eventually cost almost £7,000 more once accounting for the cost of bringing a property up to spec.