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Fixer-Upper Properties Not Much Cheaper Than New Builds in the UK Property Market

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    Fixer-Upper Properties Are Only Marginally Cheaper than Ready-to-Occupy Homes – Will You Actually Save Any Money?

    Research from YOPA reveals that fixer-uppers sell at a mere 6.2% less than ready-to-occupy properties of a similar nature. The estate agency analysed the prices of unmodernised properties with comparable properties in the same area requiring no modernisation.

    Let’s look at the findings in more detail.

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      How Much Do Fixer-Uppers Cost Compared to New Builds in the UK Housing Market?

      Unmodernised properties, as defined by YOPA, include outdated kitchens, bathrooms, and decor. According to their study of property portals, there are currently 41,951 unmodernised properties available in the UK, listed at an average asking price of £313,835. This reflects a savings of 6.2%, amounting to £20,632, compared to the average price of modernised equivalents, which is £334,467.

      The South East emerges as the prime fixer-upper location in Britain, boasting 7,321 properties, constituting 17% of the nation’s unmodernised homes on the market. The South West follows with 6,336 unmodernised homes, making up 15%, while the North West accounts for 11%, featuring 4,802 properties.

      Despite these potential savings, YOPA notes a significant increase in the cost of construction materials in recent years. Official inflation figures indicate a 17.5% rise in the price of doors and windows in the past year, a 16.8% increase in ready-mixed concrete costs, and a 14.5% increase in the price of metal screws and similar items.

      CEO Verona Frankish had the following to say about the YOPA study: “Buying a fixer-upper is a great way of saving money on the initial property purchase, but is also in many ways a lifestyle commitment – are you prepared to spend all of that time renovating the home before you can properly enjoy it? If you are, fixer-uppers present a blank canvas from which you can create your ideal home while also adding great value to the property. But with the price of many building materials now significantly higher than they were just a year ago, this work will cost more than it used to.”

      Find Out More: Explore the property market with some of our handy insights, such as our guides on how to get into property investment and buy-to-let in Liverpool.

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        Why Property Investors May Want to Invest in New Build Properties?

        As the YOPA research suggests, fixer-upper properties may not be as economically viable as you may think. For that reason, buy-to-let investors may turn their attention to new builds. These types of properties offer numerous benefits that appeal to tenants and prospective buyers, including:

        New-Build Homes Are More Eco-Friendly

        Newly constructed homes prioritise eco-friendly features, reducing living expenses for homeowners and tenants.

        These savings are attributed to effective insulation, high-efficiency heating systems, and the integration of white goods, all contributing to lower carbon emissions and decreased energy consumption.

        Standard features in many properties include double or triple glazing, energy-efficient lighting, and dual flush toilets to minimise water usage.

        According to RCP London, 69% of people worry about rising energy bills. As such, anybody buying rental property may want to invest in new builds to appeal to a broader demographic.

        New-Builds Are More Secure

        As well as offering better energy efficiency, new buildings provide higher safety and security, such as newly-fitted locks on doors and windows, security alarms, and fire safety.

        Enhanced security means that investors can purchase cheaper buildings and contents insurance.

        In addition, safer homes will appeal to better-quality tenants and allow the landlord to charge premium rents.

        Read More: Dive into some of our handy buy-to-let investment guides for more property insights, including our article: Is Property a Good Investment? You can also check our comprehensive guide to buy-to-let.

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        How to Find the Right New Build for Your Property Investment Strategy

        Property developers spend a lot of time identifying the best buy-to-let areas to build new properties. They analyse market trends, regeneration potential, local amenities and more.

        As a buy-to-let investor, you’ll want to consider these things when choosing a suitable investment.

        In addition, you may also want to purchase new-build properties before they are built. This is known as off-plan investing. Developers allow investors to buy properties for a discount before construction is complete. As such, off-plan investment can result in expedited capital appreciation as those properties grow in value once completed.

        Selecting the ideal location for off-plan properties is pivotal for a successful property investment.

        Thorough research into the area’s growth potential, infrastructure development, and economic stability is essential. Consider proximity to key amenities like schools, hospitals, and shopping centres.

        Analysing the neighbourhood’s demographic trends and crime rates can also be beneficial. Accessibility, transportation links, and future regeneration initiatives are crucial in choosing an off-plan new-build property.

        Examining the developer’s track record and reputation in delivering quality projects is imperative. Understanding the local market and potential resale value also ensures you can make a well-informed property investment decision.

        Conducting thorough location analysis is integral to any buy-to-let strategy, as it significantly influences the property’s long-term value and overall investment success. For example, if you were to research the North West property market, you would see that Savills forecasts the North West to enjoy 20.2% capital growth by 2028 – they also predict that the region’s buy-to-let market would enjoy 9.2% returns in 2024 alone.

        For more property insights regarding specific areas in the UK, check out some of our buy-to-let area guides, including:

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          Author

          Dale Barham

          Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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