Bringing old and disused properties or parts of properties back into full use has been popular in the UK for some time. Derelict properties that need renovation have traditionally been easier to get planning permission for than completely new properties, and in the past developers have been able to make good use of existing features to create really desirable properties. However, now the market has taken a turn for the worse and house prices are starting to stutter slightly, is there still profit to be had from renovation?
It’s possible that we’re coming towards a low point in the market for property. Whether you’re optimistic or pessimistic about our economic future, house prices aren’t going to start rising immediately. Any signs of economic progress are only going to show in about a year’s time. Now might just be the perfect time to buy.
One of the interesting effects of the recession is that construction companies are now finding demand for their business slipping. Builders are also finding it tough to get work and specialist contractors aren’t getting the referrals they depend upon. Because of this, building work has become cheaper in the recession and it’s possible to get the work you need done both quickly and for a good price.
Selling or Letting?
Though the costs might be low at the moment, you still need to find a way to turn good purchases into income. Traditionally, conversions have worked on quick sales and banking a bit of a boost from rising house prices, but that isn’t going to happen at the moment. Because of this, lots of developers are looking to let their property out for at least the next few years.
If you are thinking about taking on a renovation remember you’ll need to take out unoccupied property insurance – it can quickly and easily be converted to landlord insurance if you decide that letting is the right thing to do. It’s true that there is still profit in renovation despite a slight flattening of house prices but it’s all circumstantial: the right property can be profitable at any time.