2016 was the year buyers turned away from fixer-uppers in search of the perfect property, right down to the furniture. Stats from property portal Prime Location found that searches for furnished properties for sale jumped 51% last year, while searches for homes in need of a little TLC fell. This could be great news for savvy buyers.
The arrival of a whole host of tax changes for landlords in 2017 has cut profits in the buy-to-let sector – particularly as this year saw average UK rents fall for the first time in seven years. That means it might be time to turn over a new leaf when it comes to property profits.
The act of renovating fixer-uppers and selling them on is known as ‘flipping’ and it’s a proven way of getting more for your money. Sales data shows that the average increase in value when flipping a property now stands at 37%. With the right approach, this can translate to a healthy profit for investors, or a great opportunity for home seekers to access impressive properties for less.
The good news is that the current climate is good for value seekers. Renovation advice often suggests buyers look for ‘the worst house on the best street’ and there are plenty of new hotspots in which you can find those.
The London market is cooling and investors are looking outside the M25 for ideas. With a wider net, it’s much easier to identify properties that won’t lose value when you invest. For more certainty, keep your eyes peeled for signs of potential gentrification. These include regeneration plans, foodie events and fresh neighbourhood branding like the sudden addition of ‘Meadows’ or ‘Village’ to a place name.
As with people, the real beauty of property potential is on the inside. While some might only see décor in need of an update or flaws to fix, smart buyers see the chance to create the perfect home or a tidy profit.
If you’re worried about adding value, tools like Towergate Insurance’s renovation calculatorcan help you decide where your funds are best invested. Things like a garage and loft extension tend to add the most value, while flooring and decking have less impact. Choose wisely and who knows how high your property profits might fly.