First-time buyers are increasingly buying homes that need renovation work in order to secure a place on the property ladder according to new research from Nationwide Building Society.
The lender found that 66% of first-time buyers purchased a cheaper property specifically because it required DIY or refurbishment work, with many using the strategy to buy in their preferred location or secure a larger home.
Nationwide’s research suggests the so-called “fixer-upper” approach is becoming a key route into homeownership as affordability pressures continue to squeeze buyers.
The poll of 2,000 first-time buyers found 41% said buying a property needing work allowed them to purchase in the area they wanted, while 30% wanted the opportunity to personalise the property and 23% hoped to add value over time.
FINANCIAL COMMITTMENT
DIY activity has also become widespread among younger homeowners, with 93% carrying out at least one improvement project since moving in.
However, many buyers found the scale of work exceeded expectations, with 75% saying they had undertaken more renovation than initially planned. Almost one in five (18%) ended up tackling major structural projects such as loft conversions, extensions or knocking through walls.
The findings also reveal the financial commitment involved in modernising older homes. Six in 10 first-time buyers said they had already spent more than £2,500 on improvements, while 29% had spent in excess of £5,000.
Nationwide says larger renovation projects can significantly increase a property’s value, with its recent What Adds Value report showing loft conversions or extensions can boost the value of a typical three-bedroom property by up to 24%.
SAVVY CHOICE
Carlo Pileggi (main picture, inset), Head of Mortgage Products at Nationwide, says: “For many first-time buyers, opting for a cheaper property that needs work is a deliberate and savvy choice rather than a compromise.
“By taking on a home requiring renovation, they are not only able to get onto the property ladder in the location they want, but they can shape it to their own taste while adding to its value.
“Although there’s a real enthusiasm amongst first-time buyers to roll up their sleeves, our research suggests many have had to undertake more work than they initially intended.”
CREATIVE THINKING
Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents), says: “Many first-time buyers are having to think creatively to get onto the property ladder, and choosing a home that needs improvement work is becoming an increasingly common route into homeownership.
“While taking on a fixer-upper can offer buyers the opportunity to purchase in their preferred location and add long-term value to a property, it’s important that people fully understand the costs, timescales and potential disruption involved before committing.
“Research showing that many buyers ended up carrying out more work than expected highlights the need for thorough property surveys, realistic budgeting and access to trusted professional advice throughout the buying process.”
AFFORDABILITY PRESSURES
She adds: “Buyers should also factor in rising costs for materials, labour and potential structural issues that may not be immediately visible when viewing a property.
“Encouragingly, many buyers are planning ahead financially and considering renovation costs alongside their deposit and mortgage arrangements.
“However, affordability pressures continue to stretch many households, reinforcing the need for greater housing supply and more affordable homeownership options across the UK.”
