So, you’ve bought your first renovation project, but now the question is, do you refurbish the original building or knock it down and start again? John Everitt, Director at coombes:everitt architects discusses the options…
Trying to decide between a major refurbishment or a knock down and rebuild can be a very difficult decision with home-owners needing to balance both emotional and objective considerations as well as the commercial realities that underpin any construction project.
Of course, if you are simply looking at a basic extension and a quick lick of paint, then it is unlikely to make financial sense to knock your house down. However, if your new home requires a major refurbishment then the re-build route may offer you some significant cost savings.
First and foremost is budget. Unless you are one of the lucky ones to have hit the jackpot on the Euro Millions, the first port of call is likely to be setting out how much money you have available to spend.
Perhaps surprisingly, making the most of your budget is one area in which the new build route can have clear advantages. 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.
This means that you can spend all of the budget on your home rather than having to give away up to 20% to the tax man.
For example, if you have a budget of £500k for your dream home, all of this budget can be spent on the project. If you take the same budget for a refurbishment project, 20% of the budget, £84,000 would be paid in VAT leaving you around £416k to spend on the project.
These figures of course don’t take into account other costs such as professional or Local Authority fees where VAT applies, or renting a home while you undertake the project, but they do go some way to highlighting the impact VAT can have on your budget.
A CLEAN SHEET & DESIGN FLEXIBILITY
A refurbishment project is often going to restrict you in terms of what you can achieve with the existing layout and room proportions. In contrast with a new build you have a blank canvas and can create a bespoke home designed around your wants and needs. All of this comes with the benefits of modern methods of construction and improved environmental and acoustic performance. So why doesn’t everyone start from scratch?
In the UK, we have so many different and wonderful styles of home and these all come with their own individual architectural charm, heritage and history. With a refurbishment, you can preserve these elements and this authenticity is not something you can simply replicate. These features can also demand a premium price and by adding a contemporary extension to a heritage property then you may create a building with a higher end value to that of a similar size new build. This does depend very much on individual house type and location.
Within an existing building depending on any site-specific planning restrictions i.e. a listed building, within a conservation area there are certain works that can be carried out under permitted development or without planning approval. As such it may be possible to make an immediate start on your project.
A new build project does come with additional challenges, for instance you will need to apply for planning for both demolition and replacement at the same time and you will need to present a robust argument as to why the new build home is better suited to the site.
There is also the environmental aspect to consider. Generally, studies have shown that less energy is used refurbishing a property than is used to demolish and build a new property from scratch this is somewhat dependant on the extent of the works proposed however it is certainly true that in the demolition of a property a lot of embodies energy will be lost.
However, the long term running costs are often lower for new build projects than refurbishments. Even if you retrofit an original property and bring it up to modern standards with improved energy efficiency, the reality is, it’s still going to use more energy and cost you more to run. With a new build project, you can make it air tight, include mechanical heat recovery and build in sustainable energy technologies and energy generating technologies to help offset the running costs.
Budget aside, a new build project offers you a number of advantages. The first is the ability to get a ten-year warranty on your new home, this 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 and while you can get warranties on refurbishment projects, in my experience they exclude so many aspects of the project that they are rendered ineffective.
Clearly there is no right or wrong decision and the choice is very subjective. Ultimately it will come down to the state of the original property, its location and personal preference of where you see value.
Some may view it as wrong to demolish a building that is structurally sound simply for the financial benefits. In our experience 70% of the bespoke dwellings we have been involved with, end up as replacement dwellings even if that was not the original intention.
In all cases, our advice would be to talk to an architect before making a decision, this way they can help to draw out what it is that you desire in you dream property and help you to realise these aspirations.