Renovation guide: Maximising ROI on your UK property

Every investment aims to get a profit that is worth the expenses you have made as an investment. Hence, when people build or buy properties, they hope to get a high ROI worthy of the money they’ve spent.

Knowledge of your ROI on your UK property is important as it helps to determine the success of your renovations and what future decisions to take.

When a person invests in renovating a property, they aim to get excellent tax benefits and create positive cash flow with a high return on investment.

We will guide you on how to maximise ROI on your UK property starting with enlightening you on how the UK property market works and ending with how to add value to your property beyond merely renovating it.

You will learn how to plan and budget, how to infuse smart technology into your renovation, how to find the right contractors, and how to obtain the required permits to avoid legal issues.

Understanding the UK property market

The general state of the UK market was in recession at the beginning of 2023 but experienced an early recovery in the second half of that same year.

Specifically, the UK property market has been affected by this recession and there has been a 1.8% fall in prices over the year. Specific locations such as England, Wales and Scotland experienced a 1.1%, 1.2% and 5.6% reduction in property value respectively.

Recently, the price of properties has fallen by 0.25% compared to the previous year and increased by 0.5% compared to the previous month.

 The question now remains, is the UK property market a buyer’s or seller’s market?

The UK property market is very competitive for sellers as over 20% of them have had to reduce their prices by 10% and above to close a sale. Sellers are doing everything to get buyers’ attention, even reducing their property’s original prices.

On the other hand, there has been a 20% increase in sales agreements as over 25% of buyers have registered and have shown interest in viewing properties.

The latest trend has verified that the UK property market is tilting towards becoming a seller’s market.

Despite the influx of serious buyers, sellers have to be strategic about giving realistic pricing based on the perceived value of the property that they are putting on the market.

This can influence the renovation decisions of sellers as they would want to ensure that their property meets the standard of what buyers perceive a valuable property to be.

Planning and budgeting

As a seller, before you begin your renovation plans you need to plan properly and create a budget to know the amount of money you have available for the renovation, how much money you can save (if you cut down on certain things), and how much you will be willing to extend (if the need to spend more arises).

Ensure you plan properly. This will let you make informed decisions instead of just going head-on without knowing what the future holds. Factor things like payment for potential permits, labour costs, scope of work, materials, transportation costs, etc into your budget.

The tip for budgeting for a renovation is to write down the areas you wish to renovate – you can do this together with a building contractor. Start with the important areas first down to the less important areas.

Remember that every property is different so budget according to what the property needs. Calculate your income, savings or whatever grant you may have received for the project.

Don’t be afraid to trim the budget or make adjustments where necessary. Set a renovation goal based on the ROI you wish to get and your target customers.

 Smart renovation

When making a smart home renovation, you have to first consider the options that will give you the highest ROI such as paint refresh, entry door replacement, minor kitchen remodel, addition of composite decking board to outdoor space, installation of new flooring, kitchen counter upgrade and Heating, ventilation and air conditioning (HVAC) electrification.

There are measures you can take to achieve quality renovations while not spending so much money. First, consider getting second-hand products which will be cheaper and still deliver the quality that you need.

Secondly, instead of getting rid of some existing items, repurpose them to other areas of the house. Before you make a purchase, compare prices to determine the best price you can pay for that product/service.

Don’t ever assume that whatever price you are told is non-negotiable, if not, you will not know how much vendors are willing to cut off from their original price offer.

If there are projects that you can do perfectly by yourself, then save the labour cost on that and do it yourself. Make all or most of your household options energy-efficient to save cost on energy bills.

 Finding the right people

Remember that renovation is as important as building the house itself, hence you must hire the right contractors. How do you know the most qualified and reputable contractors for the job?

You must find reliable tradespeople to ensure that the project is completed in record time and with highly skilled individuals.

If they are an agency, then their team must have specialised skills that cover all the renovation you need. Ensure to check their portfolio and reviews by previous clients.

Let them have a clear and transparent means of communication with you, and ensure you go through their quota to determine if their pricing structure is fair.

They should be flexible and creative enough to make their input as the project goes on.

 Legalities & permits

You would not want to start your renovations and have them stopped halfway by government officials or building inspections for breaking certain rules or not meeting safety standards.

Aside from stopping your renovations, you can incur additional liability and costs, government sanctions or penalties if you do not obtain the necessary permits from the right authority.

Some legal issues that must be taken into consideration before starting your renovations include restrictive covenants, lender consent, planning permission, building regulations, insurance, and council tax band.

You can also consult with legal personnel for legal advice and guidance on matters relating to residential and commercial renovation, and neighbour disputes.

 Adding value beyond renovation

Aside from renovating the building property itself, there are other ways to increase the value of your property such as landscaping (i.e. improving your garden) and staging.

The aim is to improve curb appeal and create the right first impression so that you can easily attract the right buyers who make the best offer.

 Conclusion

Getting a high return on your investment is the dream of every homeowner or property seller. After making major renovations, you would want to make a sale that covers the cost of the renovation and still gives you a high profit.

Everything you need to consider before you start your innovations and during the renovation is explained in this article and if followed religiously will help you maximise ROI on your UK property renovations.

DISCLAIMER – “Views Expressed Disclaimer: Views and opinions expressed are those of the authors and do not reflect the official position of any other author, agency, organization, employer or company, including NEO CYMED PUBLISHING LIMITED, which is the publishing company performing under the name Cyprus-Mail…more