Should I renovate or rebuild?

Sometimes a property pops up that is really down in the dumps. It would require more than just a lick of paint to get it back to working order, and there is a major decision to be made. Should this property by renovated or should it be knocked down to allow a new property to rise from its ashes. This article will discuss this conundrum in more detail looking at the pros and cons of each solution and potential problems that could arise. Maybe the first question you should ask yourself is – is it cheaper to renovate or rebuild?

Is it cheaper to renovate or rebuild?

As a rule, building a new property from the ground up is almost always cheaper than renovating an old property. Why this is the case is not 100% clear, but it is in part to do with the fact that repairing things is more difficult that you anticipate. Small fixes can quickly become big fixes, and quick repairs can often uncover hidden problems. As a ball-park figure the cost to rebuild a property from new is about £1000 per square foot, while to renovate/convert and old house will cost around £1200+ per square foot. These are very rough estimates, but they give you some idea of relative costs.

Why demolish and rebuild?

A plot of land that has planning permission ready for you to build your perfect house on is becoming more and more difficult to find. It may therefore be easier to find a house in a severe state of disrepair and simply demolish it and then build a new property in its place. While not guaranteed that you will get permission to rebuild, the likelihood is greater than if you purchase a greenfield site (i.e. a plot with no previous building on). As well as the benefit of having a greater chance of obtaining planning permission, you can also save a lot of money and time due to the fact that there is already waste and electricity supplies to the plot, left over from the previous property. Add to this the chance of reusing some of the old materials from the demolished property means you can save even more over a fresh new build on a previously unoccupied plot of land.

Problems with demolishing and rebuilding

Unfortunately it is rare that you can purchase a rundown property at the same price as a fresh plot of land, even if there is little option but to demolish the current building. So buying an plot with a building on it will almost always cost you more. When you do buy the old property the decision to simply knock it down may not be as clear cut anymore, and you may have thoughts that renovating it instead is the better option. These decisions eat into your time and thus your repayments. One issue that may sway you is the costs of both options, but figuring out which is the better financial decision is not clear cut, and ultimately it may just come down to a gut decision on your behalf.

One issue to keep in mind is that you are not guaranteed to automatically get planning permission to build a new property just because at one time or other someone used to live on the plot. Even if the building has been left empty for a very long period of time the authorities may still deny permission to demolish and rebuild. The current state of the building is often the telling factor in this decision. If you are considering converting a barn you need to take particular care, because even if you keep some structures but knock down others, the local councils may take a dim view of it and close down the job completely.

Other potential problems with buying a property with the aim of building new builds on are legal arrangements, boundary disputes, ransom strips, and rights of way issues.

Legal issues

Quite often when you purchase a building plot the seller (vendor) attaches some terms that are legally binding. These can sometimes be trivial and not an issue (e.g. no tall trees to be planted etc.); however, sometimes things are more problematic, and importantly costly. For example, there are sometimes agreements which state that if any building work is taking place fences or walls must be put up to shelter neighbours from the disruption, or there may even be nasty clauses which state that the property cannot be further developed. The former issue will cost more money, and the latter can halt your plans entirely. While there can be workarounds these will often cost significant amounts of money, sometimes as much as 50% of the added value the modifications have made.

Disputes of boundaries

Believe it or not you can be sold a plot of land only for it to turn out that you do not own all of it, or even any of it. This is actually a pretty common situation, and can arise due to people still using old maps to divide up plots of land. The boundary lines drawn on these old maps to section off plots of land can be very thick and not 100% accurate, and this creates grey areas as to who actually owns what, and this can only lead to disputes. To avoid such situations you should ensure that the plot you are interested in is officially registered with the Land Registry, and this should be done so using satellite imagery and positioning technology. New laws state that registered plots should be done this way.

Ransom Strips

Ransom strips get their name from the fact that developers can be made to pay way over the odds for a small area of land that they need to build their property. Quite often there is a small area of land that belongs to a neighbour, for example an area of land that provides access to the plot that is being developed. Rather than allowing this land to be purchased at a reasonable going rate, the owner often plays the situation and knows the buyer needs the land more than they need to sell it. They therefore hold the buyer to ransom and charge ridiculous figures. This is not always the case and there are decent people in this world, but it is something you should be aware of.

Access to rights of way

Rights of way and wayleaves for cables and services can impact on your property. If you employ a good solicitor during the buying process they should pick up on these and you can then negotiate with the seller (vendor) a reduced fee. Having these rights of way and access to cables etc. will have a good chance of impacting on any resell value of the property, so it is always best to uncover these issues before you buy.


Less greenfield plots ripe for development means seeking out old rundown properties and demolishing them for the land is a real viable alternative. There are issues, as discuss above, to doing this, but the likelihood is that this will be a cheaper and more straight forward option compared to buying a new build or renovating/converting an house to make it suitable to live in. Sometimes the option to renovate or completely rebuild is an emotional and personal one, and sometimes this choice is taken out of your hands by local authorities. If you are careful and use a good solicitor when buying an existing property to ensure there are no hidden pitfalls such as rights of way or potential boundary issues, the process will hopefully be straight forward and save you money in the long run.

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