As we reported recently, if you purchase a second home that is uninhabitable you can avoid the LBTT surcharge. Not only can you avoid this additional tax payment, you could also maximise your return on investment.

According to recent research from Rightmove, over 90% of people would consider buying a property in a state of disrepair. If you’re among them and decide to purchase a property in need of renovation, what should you consider?

Get the right advice

The first step is to get the right advice from the off. Talk to architects, builders and your local council to find out what you need to be aware of and what the common pitfalls are. Also talk to your local estate agent and find out how much value certain projects will add to your property as this is very much dependent on the area in which you’re buying. For example, spending money on a driveway in a rural area may not add any value whereas a driveway in an urban area where there are parking charges could make a huge difference. Talk to us at The Mortgage Hub about how you can get the best mortgage deal as soon as you see a property you are interested in buying – getting the right mortgage deal can make a huge difference to your budget and return on investment. There are many factors to consider so talk to the experts.

Work out your budget

Work out your purchase price, cost of all associated fees and get a clear picture of how much you have to spend on the renovation. Don’t work your way up – work your way down starting with the must-haves and finishing with the would-likes. Don’t forget to include a buffer as renovation projects often go over budget. Don’t try to stretch your budget by cutting corners and if you do need to cut costs apply this to your decorating and décor rather than building work. You won’t get your value for money by skimping on quality building.

Consider the type of property

It’s important to consider whether the property is located on a World Heritage Site or is a listed building. This will greatly impact the renovations that you can undertake. There could be stipulations that some original features need to remain intact, you may not be able to change the layout and any works may need to be in keeping with the design of the home. Don’t forget the outside – are there any protected trees in your garden that are at odds with your plans for landscaping? If you do opt for an older property it may be worth paying extra for a structural survey – we can advise you on this.

Don’t forget the garden

There’s no point in spending all your time and money on the inside of your property if you have no kerb appeal! Make sure you consider the outside of the property and factor in any costs to get this area up to scratch. Research has shown that outside space can add up to £22,000 to your home (Zoopla 2018) so it could be well worth the extra investment.

Work out what buyers want

Buyers want to see lots of space, plenty of natural light and a well-considered internal layout with plenty of storage to put clutter out of sight. A renovation that delivers sparkling clean kitchens and bathrooms with a hint of luxury will be a winner.

Talk to us at The Mortgage Hub about purchasing a second home or a property that needs renovating.