As the housing crisis continues, new build properties are cropping up by the thousands across the UK. The government’s aim is to create 300,000 new houses each year to help with the crisis. But will the key benefits now focus on fuelling the economy?
Back in 2017 we released a report on homebuyer decisions. From this, our survey found that a staggering 81% of adults were unenthused by the prospect of living in new-build housing developments. Now, after the effects of Covid-19, people are also looking to make improvements in their own home if moving is not an option. Yet new builds are still in popular demand. In 2019 alone, 161,022 new homes were registered. For first-time buyers, this is usually down to the fact that new builds are the only feasible path. Most government help-to-buy schemes only work with new properties, with the idea of ‘build more, sell more’.
Yet land is becoming a precious resource, and our green areas and countryside are starting to diminish. Which begs the question, why are empty houses being ignored? A study conducted by The Guardian last year discovered that over 216,000 homes in the UK are long-term unused. In relation to the amount of new homes, this would have amounted to 72% of the governments’ goal.
Government funding for refurbishing unused properties is available. Although it can be a lengthy process to obtain this funding, the benefits of refurbishing an older property can be significant.
Refurbish. Reuse. Resell.
A ‘Long-term empty’ property means the building has to have been unfurnished and unoccupied for over two years. Due to the circumstances, these properties tend to be cheaper than the average cost of a similar property and could therefore hold great investment opportunities. Whilst government refurbishment funding can be time consuming and complicated, a refurbishment bridging loan could be a fast alternative to take advantage of.
There are plenty of ways in which you can revamp old properties:
- Restyling and re-modelling interiors
- Transforming houses into flats
- Converting old commercial buildings – Old barns and churches have been popular conversion targets in recent years
Refurbishing a property can be a great way to increase the yield on a property portfolio. They are a popular choice for many BTL landlords and property investors. However, refurbishing an old property can also create a wonderfully unique home for a buyer. Merging and modernising old architecture is very much an on-trend, niche avenue that is popular in the market. As a style that can incredibly hard to find, could restored properties become the future of property investment? Advantages of an older property can include:
- Finding larger gardens with a property compared to those provided with new builds
- Good space internally which provides more options for layout
- Original features that provide the refurbished property with character
The older the property, the larger they tend to be. With the extra space, you may find that converting holds a better alternative to refurbishing. The ability to convert a house to spacious flats is an appealing alternative for landlords looking to build up their assets. Similar to auction finance, restoring old properties opens up a chance for property investment to not only help the economy, but also themselves.
The Green Homes Grant scheme
With extra help from the government, now might be the time to refurbish. Schemes such as the Green Homes Grant are set to start at the end of September, and run alongside the Stamp Duty holiday. Both of which end in March 2021. As mentioned in the release of the autumn budget this year, the government are willing to provide a voucher worth between £5,000 – £10,000, to help cover up to two-thirds of energy efficient home improvements. The scheme will also be running until 31 March 2021.
Homes to hospitality
Whilst high streets have been struggling over recent years due to the rise of ecommerce, quirky bars and unusual coffee houses have become a favourite, particularly with millennials. They hold many commercial lending opportunities, whether it be as a:
- Coffee house
- Restaurant and bar
- House style pub
- Site-specific theatre house
Converting old houses for a commercial use could help to not only boost the economy via real estate, but also increase local businesses and revive the high street. As well as creating more jobs, which according to recent reports is certainly something that needs to be focused on in the coming months.
Effects of Covid-19
As we all know, Coronavirus has changed everything. Including the way we view and value properties. When lockdown shut the UK back at the end of March, a third of people outrightly stated that potential plans for moving were off the table. Instead, refurbishing became a preferable option. Many were looking to adapt their home in a way to make them ‘office friendly’. With millions of people now looking to work from home on a more permanent basis, it seems that conversion could be a wise move. Particularly if you’re looking to resell.
Time to consider
Of course, like every investment opportunity, property investment relies on 3 key factors:
- Location – is it right for you?
- Cost – to invest and its potential
- Timing – investment opportunities disappear quickly, so funds need to be ready
A refurbishment bridging loan can cover issues with cost and timing, using resale or refinance as an exit strategy, and funds can arrive in your account in days. But there other aspects to consider. So here are a few parting tips to consider before taking on a restoration project:
The time it may take to convert and refurbish
- Whilst purchasing the property through a lender like ourselves can help you secure the asset quickly, refurbishing an old property won’t be completed quite so fast. Particularly if you’re looking to convert. But these projects can pay off in the long run, and as well as adding value to your property ready for re-sale, it can build up an array of unique and beautiful properties to add to your portfolio. It is just imperative to understand your timeline and make sure that your finance solution fits with that. Including scope for snags along the way!
By utilising the past, we can not only spare the green areas of land left in the UK, but also provide thousands of new homes to ease the negative effects of the housing crisis. This benefits not only property investors, but also boosts the economy and provides homes for thousands of UK residents that are struggling to find homes.
Is refurbishment or conversion for you?