The appeal of properties requiring significant renovation has fallen dramatically among UK buyers, with a mere 6% actively seeking out such projects. This marks a notable shift in buyer preferences towards homes that are ready to move into, according to recent research from property group LRG.
A survey conducted between April and June, involving over 700 buyers and sellers, revealed that more than half (53%) of prospective purchasers would not consider taking on major renovation work at all. Historically, first-time buyers have often been keen on properties needing work, viewing them as a more affordable entry point into the market. However, this demographic now shows the most pronounced change in behaviour, with only 5% actively looking for renovation projects.
While 41% of buyers would still consider a property needing work, this is strictly conditional on the asking price accurately reflecting the likely cost of the necessary renovations. Data cited by LRG from Octane Capital suggests that bringing a typical property requiring work up to standard could cost in excess of £85,000. This financial burden appears to be a major deterrent for many potential buyers.
Mark Manning, Managing Director of Manning Stainton, part of LRG, explained the sentiment, stating that buyers haven't lost interest in homes needing work itself, but rather in the prospect of effectively paying twice – once for the property and again for the extensive building materials and labour. He noted that with current increased housing stock levels, properties requiring work only successfully sell when their pricing genuinely accounts for these renovation costs from the outset.
These findings carry significant implications for the UK property market. Sellers of homes that require substantial work may need to recalibrate their pricing strategies to align with current buyer expectations. Those who price their property based on its finished value, rather than its current state, are likely to see a rapid decline in interest. The shift could also affect property investors who have traditionally sought out below-market deals requiring refurbishment, as competition for such assets may diminish. The research, which is not a peer-reviewed academic study but a market survey, aligns with anecdotal evidence of buyers seeking more certainty in a challenging economic climate, where unexpected costs can be particularly impactful.