£40,000 Discount for fixer uppers

• Fixer uppers requiring structural work valued at 17 per cent less than market average
• 62 per cent of estate agents believe money still to be made in flipping houses
• 11 million Brits think fixing up a home is more cost-effective than buying a home recently decorated

New research¹ from Direct Line Home Insurance reveals that homes that require major structural work can be purchased for £40,000 less than the market average. Research among estate agents found 'fixer uppers' (houses needing major works) can be purchased for around 17 per cent less than the market average.

As a result, these properties can provide a more affordable way for first-time buyers to get on the housing ladder, or for investors looking to flip a property to still make a profit. In comparison, houses requiring only minor structural fixes can be purchased for £13,500 (six per cent) less than the market average for the property.

Estate agents highlight there is still money to be made in flipping properties, with 62 per cent believing buyers can capitalise on price reductions if renovations are required and make a profit even if a house requires structural work. However, there are considerations depending on the area, as one estate agent located in Bristol reported that there can be consequences with higher value properties: "Stamp duty has eroded the value of any profits."

When planning to add value to a property, research shows homeowners can boost the resale price by £9,980 on average by redecorating every room. The best single room to renovate is the kitchen, which alone can add £9,275 to the value of the property. Renovating the bathroom on a property can add £7,532 to its value.

Work on home	Value added(£)
Redecorating every room	£9,980
Renovating the kitchen	£9,275
Renovating the bathroom	£7,532
Renovating original features	£7,358
Adding modern dressing	£6,071
Refurbishing the property’s exterior	£4,500

Source: Direct Line Home Insurance 2018

Jeremy Bristow, Head of Home Insurance at Direct Line, commented: "Fixer uppers are still a good option for first time buyers and there is still money to be made for those looking for a challenge by renovating a property. However, homeowners should keep the costs of major work in mind and ensure they are not taking on too much work.

"Putting your own personal touch on a home can be fun and exciting but complications could lead to a hefty bill. With this in mind, renovators should ensure they have a contingency fund in place should they come across any unexpected repairs."

While some people want a home that is 'ready to move into', one-in-five² (21 per cent) Brits think 'fixing up' a home is more cost effective than moving into one that has been already 'done up.' Only one in eight (12 per cent) people think the stress of fixing up a home is not worth the hassle of organising a renovation. More than a third of homeowners (35 per cent) believe fixing up a home allows them to add their own personal touch to a property, which they find extremely attractive.

Jeremy continued: "Householders who are planning home renovations should let their insurer know about any changes being made to their house. Any work that involves walls being knocked down, floors being taken up or electrics changed, can result in damage to the property. Having scaffolding erected and builders coming and going with spare keys also increases the security risk.

"Once the building work has been completed, householders should also inform their insurer of any changes that have been made to their property, as adding rooms can not only add value to their home, but also change their home insurance requirements."

Hints and tips

• Before work starts householders should inform their insurer the work is taking place, so they can review the policy and make sure the work doesn’t invalidate their cover.
  They will also need to be informed;
  • If the builder will have keys to the property
  • If the property is being left unoccupied³
  • If there will be scaffolding up on the property
  • If the security of the property will be compromised at any time during the work e.g. replacing doors and windows
• Check they have accidental damage cover on their home insurance⁴
• Ensure the builder is qualified and registered with a recognised governing body
• Ensure they have a Standard Buildings Contract in place with their builder
• Make sure the builder has public liability insurance, employer’s liability insurance and contractors all-risk cover
• Ensure they have the correct permissions from their local Building Control Officer before starting work, to ensure the renovations meet building and fire regulations
• Householder should also notify their neighbours of any renovation work, not only to let them know to expect a little more noise than usual, but also in case there are any party walls affected by the work

For further information on Direct Line Home Insurance please visit

https://www.directline.com/home-cover

Notes to Editors

¹Research commissioned among 100 estate agents

²Research completed by Opinium Research among 2,003 UK adults aged 18+ between 5^th and 9^th October 2018

³Leaving the property unoccupied - Householders planning extensive renovations which require them to temporarily move out of the property need to make their insurer aware the house will be unoccupied. If the house is unoccupied for more than 60 days, Direct Line will add stipulations to the policy excluding things like: theft, malicious damage and escape of water. This time limit can vary widely between insurers, so it is important for householders to speak to their insurer and understand the implications.

⁴Accident damage is often an optional additional cover on home insurance and not included as standard.

For further information please contact:

Claire Jarrett
PR Manager (Home & Life)
Direct Line Group
Tel: 01651 832 411
Email: claire.jarrett@directlinegroup.co.uk

Samantha Stewart
Citigate Dewe Rogerson
Tel: 0207 282 2856
Email: samantha.stewart@citigatedewerogerson.com

Direct Line

Started in 1985, Direct Line became the first UK insurance company to use the telephone as its main channel of communication. It provides motor, home, travel, pet and life insurance cover direct to customers by phone or on-line.

Direct Line general insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line and UK Insurance limited are both part of Direct Line Insurance Group plc.Customers can find out more about Direct Line products or get a quote by calling 0345 878 5587 or visiting www.directline.com/home-cover