Checklist for evaluating unmodernised properties before purchase

Searching specifically for unmodernised properties may not be the most common approach to the property market, but it can be a deliberate and profitable strategy, offering lower purchase prices, clear opportunities for adding value, and broader scope for repositioning.

Though there’s certainly lots of potential upside in this niche, there’s no such thing as a foolproof property investment. Specific technical, cost, and regulatory risks act as a counterbalance to any opportunity, and is something that investors, developers, and other practitioners need to consider before any exchange.

In this checklist, we’ll go over all the crucial variables you’ll need to consider when evaluating unmodernised properties, ensuring that you can limit your search to opportunities that minimise your risk as much as possible.

Property Market Context

If you’re a buyer looking for unmodernised properties, having some knowledge of the UK’s current market conditions will provide an important advantage in all future decision-making.

Here’s a quick snapshot of the state of unmodernised properties to bear in mind as you begin exploring your options:

• According to the government’s English Housing Survey, “3.5 million households (14%) in England lived in a home that failed to meet the Decent Homes Standard, 2.1 million households (9%) lived in a home with at least one Category 1 hazard.”
• Energy compliance is a major value factor. While median EPC scores have improved in recent years, large variances persist by age and region. Older stock is disproportionately below EPC C (the target minimum standard), and energy-related upgrades are likely to be a core element of future refurbishment budgets and feasibility.

Unmodernised Properties Evaluation Checklist

How to use this checklist:

When you’re exploring the market for unmodernised properties, evaluate each opportunity against this list before proceeding with an exchange.

If any check brings up a significant risk, you can either:

• Obtain quantified costs and specialist reports to adjust the price and terms accordingly.
• Walk away.

For use in a professional property portfolio, be sure to standardise your checklist process with the same survey brief and thresholds, ensuring that your underwriting is repeatable and reliable.

Due Diligence Checklist

1. Screening and Initial Data Pull

• Title and legal constraints, such as covenants, easements, rights of way, and express restrictions, as outlined in Land Registry documents.
• Planning status and constraints, checking local plan allocations, conservation areas, and any enforcement notices that have arisen in the past year.
• Heritage designation and listed status.
• Obtain the latest EPC, noting down the band and any recommended measures. Use this to size thermal upgrade needs, as unmodernised stock often requires insulation, window upgrades, or heating strategy changes.
• Check the Environment Agency flood maps of the area.

2. Commission the Necessary Surveys

Older and unmodernised properties will require more diligence than a simple mortgage valuation. Crucial surveys to commission include:

• RICS HomeBuyer Report (Level 2) for conventional properties where defects aren’t obvious, and a RICS Building Survey (Level 3) for unmodernised and period properties, conversions, or situations where you suspect concealed or structural defects. 
• Specialist reports as required, for example, an engineer’s survey if there’s any structural concern, damp/condensation inspection, electrical and gas safety/compliance reports, and asbestos surveys for pre-1970s builds.
• Boiler service history. For gas systems, a full service and boiler quote is always better than a standard visual check.

3. Structural and Building-Fabric Checkpoints

• Walls and foundations checks, looking for historic movement, stepped cracking, corbels, and failed lintels. If any cracks exceed the hairline or are accompanied by distortion, it’s best to get a structural engineer’s brief.
• Roof and chimneys, including the age of the structure’s covering, the condition of its timbers, and any signs of water ingress. Depending on the property, you may also need to arrange for a hidden roof space inspection.
• Damp and rising damp, measured using specialist moisture readings. While superficial decoration is cheap, rising damp remediation with tanking and replacement damp proof is anything but!

4. Building Services and Compliance

• If the property is pre-1970s or has old-style fuses, arrange an inspection and budget for rewiring.
• Check pre-2010 boilers that may require replacement to meet low-carbon transition goals.
• Commission a CCTV survey of drainage and foul systems. Though expensive, this step will cost significantly less than the cost of dealing with a collapsed drain or private treatment plant.
• For pre-2000 builds, you’ll need to carry out a mandatory survey and management plan for asbestos if any planned refurbishment will disturb the fabric in the building.

5. Regulatory and consent risks

• On listed buildings, unauthorised works are a criminal offence. Make sure to budget for conservation architect input and plan for longer pre-application timelines.
• In England and Wales, you’ll need to respect the Party Wall Act by notifying neighbours where any planned works affect shared walls, loft conversions, or excavations. 

6. Energy and Futureproofing

• Current policy movement signals that there’ll be higher minimum standards for privately rented homes by 2030. Buyers and lenders will prefer higher EPCs, while for investors, higher EPC requirements will affect the lettability and exit valuation.
• Make sure to investigate and factor in costs for glazing, insulation, and low-carbon modelling when you’re doing your projections.
• Part L building regulations are different for existing dwellings compared to new builds. You’ll need to follow these regulations carefully if you’re planning any major thermal upgrade or heating replacements, so plan for early engagement with a building control or energy re-modeler.

7. Costing and Contingency

• Commission a Rough Order of Magnitude (ROM) for refurbishment. These kinds of assessments can vary widely, typically £45k-150k if you’re planning for structural work, replacement services, and energy upgrades.
• For most unmodernised properties, bake a 15% contingency into the refurbishment budget. This should increase to 20-30% for period and listed building projects.

8. Valuation and Deal Structure Checks

• Weigh up survey findings and valuation. In situations where remedial costs affect market value, ask your surveyor to share a valuation-adjusted figure. This is crucial before purchase, as it will help to preserve your warranty and general leverage in negotiations.
• If there’s complex works on the horizon, use staged exchange with conditional survey and finance clauses, or deposits held to cover any urgent remedials. If you’re buying as an investor, try to get a contract with a break clause that’s tied to any asbestos and structural findings.
• Check VAT and funding, remembering that repair vs improvement VAT is different. If you’re planning to convert or add rooms, or create new dwellings, look for specialist tax advice, and research your options for redevelopment grants for energy upgrades.

9. Exit and Operational Considerations

• If you plan to hold and let an unmodernised property, model its MEES cost exposure and the likely rent uplift from any planned refurbishments.
• Investigate likely insurance costs and lender appetite as thoroughly as you can. Remember that some lenders will put restrictions on older or poorly maintained properties, so try to obtain lender pre-approval where possible.

Evaluating Unmodernised Properties for Long-Term Success

To maximise your chances of success in the current UK property market, be sure to treat unmodernised properties as the technical acquisitions they are, requiring professional and structured underwriting to ensure you’re getting the full picture before purchase or investment.

We hope this checklist serves you well as you explore the unmodernised niche and find the opportunity you’re looking for. For more expert support with working towards your property goals, be sure to check out our other resources on buying, designing, and building.