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Getting the timing right for a house renovation (Hard brexit & Covid-19)


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I have been granted planning permission and building control for a large house renovation project in the South Belfast area (predicted cost of £100k+). I had been due to put this project out to tender two months ago. I have decided to hold tight to see what happens with prices due to Covid-19. I have spoken to a builder and he informed me material prices have shot up due to Covid-19.

I guess my question is how long should I wait before getting quotes in for my project. I believe Covid-19 material prices will start to normalize as production resumes due to Covid-19 restrictions easing. I guess I want the ending of the furlough scheme to reduce demand from folks wanting to undertake a renovation thus decreasing labour costs with increased competition amongst builders for the little work there will be available.

My main worry is waiting in the hope of labour costs reducing brings in the added uncertainty of a no deal brexit pushing material prices sky high.

There has been people in this forum saying to wait 6 months since the start of lock down and the price of renovations will plummet. I know we are not quite 6 months in but quotes I have heard from people receiving have come in way over budget with no sign of costs decreasing as of yet. I know building costs have more than doubled since 5 years ago for example especially in the Belfast area.

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I would precede with caution in any renovation project. Be aware builders estimates are often very optimistic and they always tend to run into problems that will blow the budget. A neighbour of mine recently finished a two stored extension which was beset with delays and problems, they ended up sacking one builder and getting a completely new one in. The end result is a house where the numbers just don't add up. Initially the house was worth about £170k, the extension was budgeted at £50k but ended up costing nearly £100k, final total cost £270k. Unfortunately the house in it's finished state would go for no more than £215k and that's in the temporarily bouyant market, give it 6 months and it will be worth no more than £180k. Make sure the numbers add up and take into account that building costs always run higher than predicted, plus build times are always longer than expected. Have you considered selling the house and waiting until after furlough ends.

 

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22 hours ago, astrid said:

I would precede with caution in any renovation project. Be aware builders estimates are often very optimistic and they always tend to run into problems that will blow the budget. A neighbour of mine recently finished a two stored extension which was beset with delays and problems, they ended up sacking one builder and getting a completely new one in. The end result is a house where the numbers just don't add up. Initially the house was worth about £170k, the extension was budgeted at £50k but ended up costing nearly £100k, final total cost £270k. Unfortunately the house in it's finished state would go for no more than £215k and that's in the temporarily bouyant market, give it 6 months and it will be worth no more than £180k. Make sure the numbers add up and take into account that building costs always run higher than predicted, plus build times are always longer than expected. Have you considered selling the house and waiting until after furlough ends.

 

I know I will lose money on the house after the renovation but it will be my forever home. I like the street and I fear if I sell I might not get back on the street soon enough.

I had considered getting the architect to project manage the build to hopefully help keep costs under control. Though they do charge 10% plus VAT based on the build costs. I have read you can get the contractor to project manage but they jack up the price to allow for project management.

I was speaking to a gas installer and they told me they are currently busier than ever and advised me to start as soon as possible. They said people in NI will not be going on as many holidays this year and that will continue for a good few years. This means they have more disposable income to spend on renovations.

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On 12/07/2020 at 19:14, Ni_Buyer said:

I know I will lose money on the house after the renovation but it will be my forever home. I like the street and I fear if I sell I might not get back on the street soon enough.

Good on you. Make it your home and enjoy it; if it doesn't make sense to the 'market'  but makes sense to you: it makes sense.

(Not meaning to take anything away from Astrid's valid points about caution - which would certainly apply if the value of the house been more relevant to you).
 

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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