Fix it, flip it: why renovating a property can make financial sense

Ready, steady, renovate! Buying a property that needs fixing up can be a great investment for both homeowners and developers.

In our latest Private Wealth Guides, we revealed how the typical asking price for a ‘fixer-upper’ property can be around 10% lower than the national average.

The chance to bag a bargain is proving a big draw – especially for first-time buyers. Just over two-thirds of people in rented accommodation are eager to take on fixer-uppers to get on the housing ladder, compared with 54% of existing homeowners. Saving money is the main driver for 73% of renters, while homeowners see it as an opportunity to create their perfect pad.

Understand the risks and rewards

For developers, fixing and then flipping a property can result in a rapid return on investment. The average gross profit on renovated properties resold within a 12-month period was £22,000 in the first quarter of 2025, according to data from one estate agent.

Regardless of your motivation, it’s important to consider the pros and cons of purchasing a doer-upper as there can be hidden costs – especially with potential changes to stamp duty looming. Here are some tips to help you decide if a property renovation project is right for you.  

The price is right – or is it?

Get the spreadsheets ready: there are a lot of careful calculations to make before taking the fixer-upper plunge. First up, the price of the property. Whether you’re planning to love it or list it, take time to research the prices of similar properties in the same area – both before and after renovation. It’s also important to check if the local housing market is rising or declining and to consider factors, such as planned developments or improved transport links, that could impact prices in the future.

Next, it’s renovation budget time. Costs will vary considerably depending on the state of the property, the scope of your project – and your DIY expertise! One construction company estimated the average renovation outlay at between £76,900 and £138,800.

With the price of materials and labour on the rise, it’s important to factor in small details as well as big ticket items, such as replacing old windows or boilers. A property that is structurally sound will normally be easier and cheaper to renovate, but it’s still important to have a contingency fund.

If you need a mortgage to help finance your fixer-upper ambitions, then remember that most lenders will only approve applications for habitable properties, which usually means they must have a kitchen and bathroom.

Location, location, location

Some areas are more popular than others for fixer-upper projects – especially if you want to remarket a property quickly. In the first quarter of 2025, 61% of flipped properties were located in the Midlands, North of England or Wales, where more homes fall under the current stamp duty threshold.

Higher prices in the South East, East of England and London mean flipping rates and profits have declined. It’s estimated that the average investor’s return from a property in London after paying stamp duty is now likely to be 8% lower than before.

Home sweet home

Properties that require doing up can be an opportunity to create the home that you’ve always wanted. From doors to floors, you can personalise as much or as little as you want – just don’t be put off by any existing fixtures or fittings, such as coloured bathroom suites or patterned carpets.

You could also consider improvements that make your home greener and cheaper to run. Nearly 60% of renters and homeowners believe taking on a renovation project would enable them to make a property more energy efficient, which could help to reduce living costs in the future.

Ready to take the renovation plunge? The residential property team at Attwaters can provide personalised conveyancing support. Get in touch today on 0330 221 8855 or complete our online form for a conveyancing quote.

You can find more articles like this in our Private Wealth Guides and on our social media pages under the hashtag #PrivateWealthGuide.