HOW TO MAKE MONEY FROM PROPERTY RENOVATION IN LONDON
Planning a rennovation project ?
Renovating a property to turn a profit can be an attractive proposition, particularly in high-demand areas like London. If you’re keen to jump up a rung or two on the property ladder, renovation could be the way to unlock the additional funds to do so.
However, the prospect of renovation can be daunting if you’re inexperienced and don’t know where to begin. There are rules and building regulations to abide by – particularly if your property adjoins another (if it’s semi-detached or part of a terrace) – but with the right team behind you, renovation can be simple, safe, affordable and lucrative.
Before attempting property renovation, there are several serious considerations you’ll have to make. In some ways, renovation can be trickier than seeking new build planning permission. Each city borough differs in terms of planning regulations, and you’ll want to consult the expertise of the best residential planner London has to offer prior to submitting an application to ensure your renovation plans fall in line with rules like the Party Wall Act.
The Party Wall Act is designed to prevent building work being undertaken which undermines the structural integrity of any shared walls with neighbouring properties. It has been implemented to prevent potential disputes between neighbours. If you are planning on renovating a terraced or semi-detached house, it’s likely to affect your plans.
What elements does the Party Wall Act cover?
The Party Wall Act covers “walls and other built elements”. This can include floors/ceilings between flats, shared boundary walls and any other walls which touch the boundary. Most major renovations will be affected by the party wall act, including:
• Insulating or increasing the thickness of a wall.
• Demolishing and rebuilding a party wall.
• Excavating to insert new foundations.
• Building an extension up to the boundary wall.
• Converting a loft, if you’re amending the boundary wall to support new beams.
Superficial renovations like wallpapering, re-plastering, rewiring and fitting shelves or other fixtures are not affected by the Party Wall Act.
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Financing: what you’ll need
Before attempting property renovation, you should take some time to consider how financially viable your project will be. You should take into account how you’re going to raise the funds for structural engineer reports, materials, labour costs and contingency money in case things don’t go perfectly to plan. It’s worthwhile getting a contingency fund of approximately 30% of your estimated costs in place, just to cover you in case you run into issues that you didn’t anticipate.
It’s worth considering that property renovation comes with several additional fees. For example, you’ll encounter costs when purchasing a premises to renovate, and you’ll encounter the same fees again when it comes to selling your renovated property. These fees are usually made up of the following:
• Stamp Duty (this is paid on all properties worth £125,000 in the UK, as of 2020).
• Solicitors’ Fees (these are paid for conveyancing, surveys and searches).
• Capital Gains Tax (this applies when your final profit is calculated after selling your renovated property).
• Mortgage Fees (these apply on all new property purchases – unless you buy the property outright).
• Removal Fees (getting rid of old furniture and “gutting” a property will cost you a small amount).
Finding the right property
If you’re looking to renovate a house for profit in London, it’s important to do your research to find a desirable property in an up-and-coming area. You’ll also want to consider the renovation value of the property. For example, could you partition the property and convert it into multiple flats? This is one of the easiest ways to make money on a renovation, provided you abide by the relevant rules and regulations.
Structural engineer services London: surveys
If you think you’ve found the perfect “fixer-upper” in London, it can be tempting to strike while the iron is hot and rush in. However, you’re going to need to arrange for a structural survey prior to any renovations to get a clearer picture of what you’re getting into.
While you won’t be forced into arranging a building survey, it can be a prudent move. It’s better to arrange for a survey costing a small amount, rather than invest thousands of pounds on a property which is unsellable further down the line.
Party wall checklist
London is full of large terraced buildings which are ripe for renovation, although you’ll need to ensure that you’re adhering to the Party Walls Act prior to undertaking any work. As a renovator, you’ll be required to provide notice of planned work to all adjoining property owners. Notice requirements can vary depending on the type of work being undertaken.
After seeking planning permission, a party wall award provides:
• The right to execute works.
• Detailing of the timing/manner of works.
• Information on who is liable for costs.
• Which homeowner is responsible (if works are shared in proportion).
• Security for expenses (if applicable).
On existing walls, you should adhere to the following notice guidelines when informing adjoining property owners:
• Notice required: 2 months.
• Counter-notice: Within a month.
• Agreement content: To “carry out works”.
• Disputes: Refer to surveyors.
If you fail to serve a notice, or serve the notice on the wrong recipient, you will be in breach of statutory procedure.
Property renovation for profit: the golden rules
After you’ve arranged for party wall surveyors in London to ensure you’re meeting all relevant regulations, you’re all set to go – almost. It’s good practice to adhere to the following rules to try and maximise the potential of your renovation project:
• Don’t get over-excited – keep a cool head.
• Do your homework – buy smart.
• Employ the services of those you can trust.
• Prepare for the worst, while hoping for the best.
• Be cautious, but don’t be afraid to take risks!
If you stick to these simple rules, you’ll be well on your way to renovation success. If you need advice on your endeavours, perhaps its time you contacted the best party wall surveyors London has to offer. At AC Design Solutions, we’re experts in structural engineering, architecture and party walls services, and we’ll ensure your renovation project goes without a hitch. Why not contact us today to discuss your requirements?