More buyers are opting to invest in renovation projects rather than fully finished homes, as limited turnkey stock, rising interest in energy efficiency and the potential to unlock long-term value reshape the property market.
According to Fergus Allen, head of bridging at Clifton Private Finance, the trend reflects a shift in both residential and investment behaviour as purchasers look for flexibility in a tighter market.
“Renovation projects give buyers options when move-in-ready homes are in short supply,” Allen said. “People are increasingly looking for ways to unlock hidden value rather than paying a premium for finished properties.”
Allen said refurbishments allow buyers to tailor properties to their needs while potentially boosting resale value. “Renovating gives buyers the chance to create a home that works for them, while also increasing the property’s market value significantly if done well,” he said.
Energy efficiency is also a major driver. With rising energy costs and growing environmental awareness, buyers are factoring long-term running costs into their decisions. “Upgrades such as insulation, double glazing and low-carbon heating systems are now central to both budgets and financing plans,” Allen added.
While renovation projects can deliver strong returns, Allen warned that careful budgeting is essential. “Professional fees, materials, labour and contingency funds all need to be considered. Costs can escalate quickly without a clear plan,” he said.
He recommends setting aside an additional 10 to 15 per cent of projected renovation costs as a contingency. “That buffer helps absorb unexpected issues such as structural problems, delays or rising material prices,” he said.
“Understanding how much can be borrowed, how much equity is available and how funds will be released at each stage is often what separates a successful renovation from a stressful one.”
Investors: renting or flipping
Although owner-occupiers are driving much of the current demand, investors remain active in the renovation market. For landlords and property investors, the focus is typically on maximising yields, rental income or resale value rather than personalising a property.
“Buying to refurbish and rent out, or to renovate and sell for a profit, requires detailed planning,” Allen said. “But for those who get it right, the opportunities are significant.”
Allen cautioned that renovation finance is not automatic. “Lenders want to see experience, a detailed budget and evidence that the property will meet lending criteria once works are complete,” he said.
For major or structural refurbishments, this can include planning permissions, structural surveys and confirmation that contractors are in place before funds are released.
Lighter renovation projects tend to face fewer hurdles. “Smaller works that don’t involve planning consent or major structural change are often more straightforward, particularly when using bridging finance,” Allen explained.
“In those cases, lenders focus less on permissions and more on the exit strategy, how and when the borrower plans to refinance or sell.”
As the supply of turnkey homes remains constrained, Allen expects renovation projects to continue attracting both homeowners and investors looking to balance flexibility, efficiency and long-term returns.
