Nationwide research finds most first-time buyers take on more renovation work than anticipated, with costs running into thousands
First-time buyers are increasingly purchasing properties requiring renovation as a means of entering the housing market, according to research published by Nationwide.
The survey of 2,000 first-time buyers found that two thirds (66%) bought a cheaper home because it required DIY or renovation work, with 19% describing the saving as significant. The trend was most prevalent in the North East and least common in Scotland.
Three quarters (75%) of respondents carried out more work than they had originally planned, with 25% of that group saying they had done considerably more than anticipated. Some 18% had undertaken major structural projects.
| First-time buyers and DIY/renovation, by region | ||
| Region | Bought a cheaper home that needed DIY/renovation | Done more DIY/home improvement projects than expected |
|---|---|---|
| East Midlands | 65% | 76% |
| East of England | 69% | 74% |
| Greater London | 70% | 78% |
| North East | 77% | 80% |
| North West | 67% | 83% |
| Northern Ireland | 61% | 68% |
| Scotland | 52% | 71% |
| South East | 64% | 68% |
| South West | 62% | 70% |
| Wales | 69% | 78% |
| West Midlands | 63% | 76% |
| Yorkshire and The Humber | 63% | 70% |
| Source: Nationwide Building Society | ||
The research identified several reasons buyers chose to purchase homes requiring work: 41% wanted to buy in their preferred location, 30% wished to personalise the property over time, 23% sought to increase its value, and 22% were preparing for future plans such as starting a family.
Renovation costs and scale
DIY and renovation activity was near-universal among first-time buyers, with 93% completing at least one project since moving in and 34% carrying out many projects. The North West recorded the highest proportion of buyers who exceeded their original workload, at 83%, compared with 68% in Northern Ireland and the South East.
Six in 10 first-time buyers have spent more than £2,500 on home improvements, with 29% exceeding £5,000. Common projects include painting and decorating, kitchen and bathroom upgrades, new flooring and general repairs. Nearly one in five (18%) have undertaken structural work such as extensions, loft conversions or knocking through walls.
An earlier report from Nationwide indicates that adding a loft conversion or extension incorporating a large double bedroom and bathroom can increase the value of a typical three-bedroom home by up to 24%.
Financial planning
Nearly two thirds (62%) of first-time buyers factored renovation costs into their deposit savings. More than a fifth (21%) borrowed more on their mortgage in order to retain savings for post-completion improvement work.
"For many first-time buyers, opting for a cheaper property that needs work is a deliberate and savvy choice rather than a compromise," said Carlo Pileggi (pictured right), head of mortgage products at Nationwide.
"By taking on a home requiring renovation, they are not only able to get onto the property ladder in the location they want, but they can shape it to their own taste while adding to its value."
Mary-Lou Press, president of industry body NAEA Propertymark, however, noted that while purchasing a property requiring work can allow buyers to secure a home in their preferred location and build long-term value, prospective buyers must have a clear understanding of the costs, timescales and disruption involved before proceeding.
"Research showing that many buyers ended up carrying out more work than expected highlights the need for thorough property surveys, realistic budgeting and access to trusted professional advice throughout the buying process," she said.
"Buyers should also factor in rising costs for materials, labour and potential structural issues that may not be immediately visible when viewing a property. Encouragingly, many buyers are planning ahead financially and considering renovation costs alongside their deposit and mortgage arrangements. However, affordability pressures continue to stretch many households, reinforcing the need for greater housing supply and more affordable homeownership options across the UK."
Nicholas Mendes (pictured right), mortgage technical manager at John Charcol, also cautioned that buyers should assess the full financial picture before committing to a renovation project.
"Keeping money back for renovations can make sense, and this is where products that allow higher borrowing may help some buyers," he said. "But it needs to be handled carefully.
"Borrowing more simply to stretch into a property only works if the monthly payments remain comfortable and there is still a proper emergency buffer. The best fixer-upper purchases are usually the ones where the buyer has gone in with their eyes open. That means a proper survey, realistic quotes before completion where possible, and a clear distinction between work that is essential and work that can wait.
"For first-time buyers, the aim should not be to create the dream home immediately. It should be to buy something affordable, safe, and mortgageable, then improve it in stages without putting themselves under unnecessary financial pressure. The opportunity is real, but so is the risk. A project home can be a very good first step onto the ladder, but only if the numbers still work after the excitement of getting the keys has worn off."
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