There are many reasons that people choose to buy a renovation project. Whether that’s the desire to inject some personal style into the property, buying a house to renovate and sell for a profit or simply finding a property that works better in your budget – buying a renovation project can be fun and rewarding.
Although properties that need renovation are often less expensive to purchase compared to those that have been newly refurbished, it’s important to consider all the costs that go into a property renovation, from purchase price and planning permission to materials and labour.
Here, we will break down some important costs you may not have considered when setting your renovation budget to help you plan your renovation project.
What is the average cost of renovating a house in the UK?
Checkatrade estimates that renovating an average three-bedroom house in the UK costs between £76,900 and £138,800.
This range can depend on several factors, including whether you are extending the property or making costly repairs such as roofs or rewiring the electrics.
It can also depend on the size of your property and your motivations for renovation, whether you are renovating with profit in mind or looking to create your dream family home.
To accurately budget for your renovation project, it’s important to factor the costs of purchasing, renovating and finishing your property into your overall costs.
Property purchase price
On average, properties that need renovations tend to be priced lower than properties that don’t require any work. However, aside from purchase price, there are some other important costs to consider at the point of purchase that should be factored into your overall renovation budget.
Purchase Price
This is the price you pay for the property itself. You will usually need a minimum of 10% deposit, although larger deposits will reduce monthly mortgage costs. There is usually room here to negotiate and agree on a lower sale price.
Stamp Duty
Depending on the price of the property, you may have to pay stamp duty on top of the purchase price. This is proportional to the overall cost of the property and can be higher for second properties.
Legal Fees
You will need to instruct a solicitor to help with the admin and legal side of purchasing a house, so be sure to factor in solicitor’s fees to your budget.
Survey Costs
Although all properties should get some form of survey, for renovation projects, it’s even more important to conduct a thorough building survey, as these can reveal hidden problems with large potential costs.
Being aware of any structural issues ahead of a renovation project can help to factor in these costs and may even present opportunities to negotiate sale prices further.
Mortgage Costs
If you are purchasing your renovation project with a mortgage, make sure you know how much the monthly payments and interest rates are. Even if you are planning to start your renovations before moving into the property, you will start paying towards your mortgage from when you have exchanged.
Renovation Costs
When it comes to budgeting for the renovation itself, there are many different contractors and costs to consider: the figure will depend on the amount of work required for your renovation project.
Planning Permission Fees
If your renovation plans include an extension or loft conversion, then you’ll likely have to apply for planning permission which has an additional cost. It can also take time for approval, so make sure to factor this into your timeline.
It’s important to wait until you have been granted permission before instructing any work to begin, to reduce costs on your renovation project and avoid wasting money on work that may need to be changed.
Professional Fees
There are many professionals involved in planning, executing, managing and checking renovation projects. From architects to project managers, structural engineers to surveyors, there are a range of specialists that you’ll need to work with in order to plan, manage and execute your property renovation.
Labour Costs
Alongside professionals, the majority of work on your renovation will be undertaken by labourers and contractors, such as plumbers, plasterers, electricians and builders.
Materials Costs
Material costs can vary. You may want to work with your labourers and project managers to shop around for the best deals.
Even if you’re renovating to sell and want to make the best profit, quality is important. You may think you are saving money by choosing cheaper materials, but this may cost you in the long run when it comes to selling your property, as new buyers will be able to tell the quality of finishes, especially if they have a survey done.
Energy Efficiency
Increasingly, homeowners are looking at ways to make their homes more energy efficient as part of their renovation projects. This may mean you want to add solar panels, a heat pump or upgrading insulation in your property.
Upgrading your windows to double-glazing can help update the look and feel of your property as well as add to the energy efficiency year-round.
Paying attention to window dressing can not only help to add a finishing touch to your rooms, but it can also help to aid heat retention in the home. Investing in made to measure blinds can help you maximise natural light and elevate your interior design whilst retaining heat and reducing your energy bills.
While this can be an upfront investment, it presents ongoing cost savings opportunities when it comes to energy bills and increasing the value of your home in the long run.
Contingency Fund
It’s crucial to allocate a contingency fund for your renovation project for unexpected issues or delays that arise. It’s recommended that your contingency fund is at least 10-20% of your total budget.
Living costs
It’s important to consider where you’ll be living while renovations are happening, as this may also incur some additional costs. When it comes to larger-scale renovations, it may make the most sense for you to move out of your home, especially if you are having work done that requires water to be switched off or no access to toilets.
While some may be able to move in with family for the duration of the renovation work, many others will have to consider short-term rentals or longer-stay Airbnb arrangements, so it’s a good idea to factor this into your overall budget.
Final Thoughts
While it can be daunting when adding up the total cost of a property renovation, by breaking down all areas involved, you will be able to get a better understanding of where your money will be going.
Understanding the costs involved can help you to prioritise your goals within your budget, without compromising on quality or the end result.
By Tom Fenton 
By Annie Button 
