Tearing down a property and starting again can be cheaper than renovating it – but it’s a big decision
The prospect of pulling down a house is a daunting one, so it’s not surprising that we tend to look towards renovation when we want a new look. However, rebuilding could be the right decision financially. “If you’re simply looking at a basic extension then it’s unlikely to make financial sense to knock your house down,” says John Everitt of Coombes Everitt Architects. “However, if your home requires a major refurbishment then the rebuild route may offer you some significant cost savings.” So, what’s right for you, and what do you need to think about? A selection of pros answer some common questions about rebuild projects.
Where to start and how to make the big decision
If your home isn’t working for you but you don’t want to move, how do you decide whether to rebuild something brand new – like this Sussex home built on the site of an old barn – or renovate? Start by being practical: consider the general state of repair of the property. “If the house is in a good state, but just isn’t in the style or configuration you want, it may make more sense to renovate,” says Nicky Bryden of CLPM.
Next, talk to estate agents to make sure you understand your local housing market and can accurately predict the value of your existing home and the renovation versus a new build. If demolition starts to appeal, call in more specialists: “Get a construction project management company, as well as a team of quantity surveyors, involved early on,” says Bryden. “They can talk you through the best way to make your decision and advise you on the likely costs of each of your options.”
Asses the age and state of the property
What is the architectural value of the existing building? Sometimes period buildings have more visual appeal, and therefore lend themselves well to renovation. “Less attractive houses, for example those built in the 1950s or 1960s, are of less merit and are more often less controversial from a planning perspective,” says Bryden.
Consider the general state of repair of the house. “If, for example, the house is in a good state, but is just not in the style or configuration you want, it may make more sense to renovate,” Bryden adds.
Think about the environmental impact
In general, you will use up more energy and create more waste for landfill in the process of knocking down and rebuilding, rather than renovating. However, if your new-build home is built from sustainable materials, and is built to a high level of energy performance, these initial energy differences could be offset by lower ongoing energy usage.
“If you are planning on renovating or remodelling your home then this is the ideal time to review your energy situation,” recommends Bryden. You will have to adhere to building regulations anyway, so going beyond the minimum standard, and making your home as energy efficient as you can, is a sensible decision. “The more energy efficient you can make you home now, the less it will cost to heat in the future. It’s also likely to make your home more saleable in the future,” adds Bryden.
Get an independent company to carry out a home-energy audit, which will calculate how your home is performing now and give you costed options for how to improve its performance. “Generally, the advice involves installing higher levels of insulation or better windows and then installing the correct size of energy efficient gas boiler with modern radiators or underfloor heating,” says Bryden. “For homes not on mains gas, it might also include the suitability of renewable technologies such as air-source heat pumps or wood-pellet boilers to replace old oil boilers.”
Rebuild for less?
In many cases, new builds are cheaper to build per square metre than a complete renovation. “Any new, self-contained house or flat can be undertaken with zero rate VAT on the construction costs of the project, including kitchen and bathroom fixtures and fittings,” explains John Everitt of Coombes Everitt Architects. “This means that you can spend all of the budget on your home rather than having to give away up to 20 per cent to the taxman.”
Renovations are also notoriously difficult to estimate. “Hidden elements such as asbestos or structural problems can be uncovered, which can quickly add costs to your building project,” warns Bryden. Be aware that renovation figures don’t usually take into account other costs such as professional or local authority fees, where VAT applies, or renting a home while you undertake the project.
A new-build project also entitles you to a 10-year warranty on your new home, which can offer welcome peace of mind when spending large sums on a building. “The warranty makes a new-build property more marketable and will be a requirement of any mortgage lender if you are having to borrow against the value of the property to help finance the project,” says Everitt. “While you can get warranties on refurbishment projects, in my experience they exclude so many aspects of the project that they are rendered ineffective.”
Just because there is currently a house on your plot of land, that’s no guarantee the local planning authority will give you permission for a demolition and rebuild.
You can’t knock down and replace a listed property, for example. “If your house is in a conservation area, an Area of Outstanding Natural Beauty or in the green belt there are likely to be limitations as to what style and size of property you will be allowed to build,” explains Bryden. The rule of thumb is always talk to your local planning authority before you buy the property.”
If you demolish a building unlawfully, legal actions might be taken against you. “I know of cases where a developer has been ordered by court to rebuild the building exactly as it was using era materials and techniques. This is incredibly expensive and very difficult,” warns Dominik Wielgus of Black Oak Builders.
Does a new-build replacement have to be the same size as the old building?
“The general rule of thumb is that that a new building must be of comparable or not significantly larger in size,” explains Wielgus. However, this greatly depends on individual interpretation. “Some councils will be okay if the new house is slightly bigger in size by volume or floor area, while others will be more restrictive and will enforce an ‘original house’ policy. This should be approached on an individual basis and consulted with the local planning department,” says Wielgus.
How can I increase the chances of my plans being accepted?
Make sure you do your homework upfront. Look at any constraints on the site. Is it a conservation area? Is it an Area of Outstanding Natural Beauty? Is it within an established settlement? Then it would be a case of talking to planners; most local authorities have a pre-application process.
“Consider what implications the replacement dwelling might have on any adjoining neighbours, especially if it’ll move to a different location on the plot,” says Everitt, “or if it’s going to be a different height or scale to the building to be replaced. I would also suggest getting some sketch plans done to have a look and see whether the design works.”
Everitt continues: “The best approach would be to talk to a planning consultant or an architect when considering a site as they should be able to give you a good steer on whether what you want to achieve is likely to obtain planning approval. Some simple checks will tell you whether the existing building is listed or not, whether any trees on the site are protected and if it is in a conservation area.”
How do I identify a site with development potential?
First, you should identify your motive for the development: for example, do you want to live in a particular area? Do you want to develop an energy efficient home? Are you undertaking the development to achieve a maximum profit?
“Identify a property in a poor state of repair, or perhaps a property that may abut a piece of land that could be brought into the development, or a site in an alternative use at the moment,” advises Everitt. “These properties may not be on the market so you may need to try approaching owners in writing directly.”
Once you have located a site then it’s also a matter of looking at what you can do to make the most of the site and its natural assets as well as potential constraints. Everitt continues: “Some of these will be obvious from a site visit, such as existing trees on or near the site. Others will require some research: for example, is the site within a conservation area, is it within a flood zone, are there any services crossing the site above or below ground. Does the site have a planning history?”
Tips to turning a profit?
If profit is the goal, whether you are renovating or rebuilding, then you need to make sure you don’t overdevelop the house and make it too personal; keep an eye on who your end purchaser is likely to be.
“You don’t want to focus too much on your own wants and likes,” says Everitt. “Generally, the more bespoke you make the property the narrower your market, although arguably you may then get more of a premium on price.”
Keep an eye on the amount you spend and on the specification, making sure you build something that is viable. “Ensure the development is appropriate for the site and its location – for example, if the area is predominantly three-bed family homes it may be that a two-bed bungalow or a six-bed executive home is not the most appropriate form of development,” says Everitt.
Everitt continues: “It is a good idea to try and build a bit of flexibility into the design so that people can envisage how they would live in it. You need to make sure that you build something that gives people a flexibility in how they’re going to live, but also works well for the market in that area.”
How much can I expect to make?
Even in the housebuilding industry there’s not that much profit in developments because land and costs have risen significantly in the past couple of years. “Typically we see developers look for between 15 to 20 per cent profit,” says Everitt. This might be quite different if you’re building something for yourself. This is because you may make different choices on the specifications and create more of a bespoke design that suits you and your family. This can lead to something that’s more expensive to build rather than a design created purely to maximise the profit via the redevelopment of the site.
Why is demolition a specialist’s job?
“Your average builder will not know how to plant explosives or safely knock down a building using a wrecking ball in an urban area, so someone specially trained has to undertake the job,” explains Wielgus.
Buildings can be demolished by hand (taken apart brick by brick), using heavy machinery or explosives. “There are different risks involved with each and a lot of paperwork is required – method statements, risk assessments, and health and safety plans amongst others,” continues Wielgus. “There is also the matter of insurance cover and potential of salvaging, reusing and recycling,” he adds. “If you want to purely demolish something, seek a specialist contractor who has the equipment, experience and insurance to do it.”
What about building regulations?
Building regulations set minimum standards for the design and construction of buildings to ensure the safety and health for people in or about those buildings. “The exact rules vary across the UK, with England, Scotland, Wales and Northern Ireland having different interpretations, so once you know what you’re planning to do then you need to contact your local building control team to ensure that you and your building team are planning to carry out the works correctly, and to arrange for your works to be inspected as it progresses,” says Bryden.
Meeting the requirements of the building regulations is the responsibility of the person carrying out the building work and, if they are not the same person, the owner of the building. For more information check out the government’s planning portal. “There is a vast amount of detail covering all aspects of the building from fire safety – like fitting heat sensors, smoke alarms and fire doors – through to energy efficiency norms for walls, roofs and glazing to drainage and ventilation,” says Wielgus.