Making Money With Niche Property Renovations

With the current property market buzzing with excitement, there’s a lot of talk about buy to let investment booming and prices rocketing.

In markets like these, it’s easy for property developers new to the industry to get carried away hoping that any property that needs a lick of paint and a new bathroom suite has the potential to make them money.

However, when it comes to property refurbishments, unless you’re an experienced tradesman or have some property experience/education, it can be very easy to over-look or miss potential problems when you’re out looking for your next buy to let or refurbishment deal.

All too often developments can have hidden issues (as can be found with properties at auction) which can be problematic to a new investor, who may not be aware of the potential hidden costs to fix any issues.

One such area to consider is the actual build of a property.

Properties with ‘non-standard’ construction are notoriously difficult to raise finance on and this limits the potential buyer market.   For the unaware investor this can cause a real problem, but for the savvy developer, it can also be a niche part of the market that can generate fantastic returns.

These types of ‘non-standard’ construction properties were common in the 1950’s & 60’s and if you know what to look out for AND can buy at the right price, then you can create a very successful niche property development business dealing with properties where other investors and buyers don’t dare to go.

The key to this is…. knowledge.   So to help explain the history, background and areas for concern with these types of properties, Trevor Yorke has provided a great break down below….

1950s and 60s houses: Adventures in Modernism

1950's housesThe 1950s and 60s are exceptional in the history of British housing as architects and builders experimented with new forms of design and construction. In the wake of wartime attrition and a desire for a bright new world they erected houses with bold shapes, daring layouts, and light interiors as Modernism became the watch word.

Although council houses were generally boxy and arranged in straight lines the private stock was more innovative with some looking like large tents or with skylines resembling a row of sails. The bare exterior which many architects advocated was seen as too daring for the mass market so houses were clad in more traditional hanging tiles and white weatherboarding to soften their impact.

Inside architects jumbled the rooms and experimented with different layouts. Tall vertical town houses with the lounge on an upper floor or staggered open plans with rooms on half landings and bedrooms tucked into sloping roofs made every house an adventure. Compared with the dark and dingy Victorian housing many were still living with these new homes with wide windows filling an entire wall were bright, modern and inviting, with most having gardens front and rear and even a garage.

s - 1950s terrace, LondonThis strikingly modern appearance however was masking up the fact that Britain was still trying to deal with a housing crisis. Bombing during the Second World War and the continuing demolition of urban slums meant more houses than ever were needed in a very short time.

The war though had left a shortage of skilled labour and suitable materials with which to build these new homes added to the fact that the country was virtually bankrupt. Prefabricated houses filled the gap initially until brick and timber once again became widely available but throughout the 1950s and 60s there was pressure to build quickly and cheaply.

Simple and economic methods of construction and cheaper imported materials were used and as a result there are a number of common problems which the would-be investor in a 1950s or 60s house should be aware of.

…Refurbishments to Look Out For…

  • Houses and flats built with concrete as the load bearing material are a problem as poor quality in some made them vulnerable to spalling and cracking allowing the steel reinforced core to rust. This resulted in building societies refusing to offer mortgages on many of these types of properties. Its use also created problems with condensation and damp penetration as well as poor insulation and those which have not been demolished have usually been extensively modified to resolve these problems. Concrete was sometimes used in walls and then covered with a brick skin so the owner may not be aware of what lies within. These should not have problems with spalling but can still have issues with condensation and heat loss.
  • Many houses were built with two load bearing walls down either side with beams running across which supported the upper floors. The front and back only needed to be thin stud walls covered in hanging tiles, timber boards or cement render. This cross wall construction is generally sound but the thin walls can leak where they meet the brick sides and may need resealing and they were usually poorly insulated so it can encourage condensation and mould to appear inside. They may require external or internal insulation to be added if cavity wall insulation is not suitable. There may also be hanging tiles missing and timber cladding rotting on the outside which will need repair or replacing to avoid water penetrating the structure.

1950s and 60s cross wall construction.

  • The wide windows with large open panes flooded rooms with sunlight but were a terrible loss of heat and often had poor quality timber frames which easily rotted. Budget for replacing these if they are still in place but also be aware that as these houses were often the first to have double glazing fitted so the replacements themselves might require updating. Lintels above the windows on many 1950s houses were a concrete beam which was exposed on the outside of the house. These can be prone to cracking or shifting under uneven loads causing cracking which will need attention.
  • Most houses had concrete roof tiles and these may be reaching the end of their expected life so it is worth checking for any signs that they will need replacement. Flat or shallow pitched roofs were also widely fitted and need regular inspections to ensure the covering is sound and water is not pooling on top. Some were arranged so they slope down to the neighbouring property’s wall so it is important to ensure that the guttering here is clear and water is draining off properly.
  • Ground floors were formed from concrete (timber flooring were popular in the 1950s but these were often only thin boards fixed to the concrete by battens and screed). Sometimes the hardcore below this contained waste from local industry to save costs but these elements when in contact with water like a leaky drain or a rising water table can cause the ground to swell and the floor to bow upwards. Check for signs of this bowing or cracking as repairing usually means excavating the floor and can be costly.
  • In general the experimental nature of many materials and types of construction means that it is worth checking locally for knowledge of any known issues with houses on a particular estate. There is no standard form of construction in this period and although most are sound they have issues which could be costly to repair. Hence although these are quite modern houses if you are in any doubt about proceeding with a purchase then pay for a detailed survey from a locally based company who may be familiar with these problem areas.

s - 1960s chalet style detached house.

As these properties are no longer deemed new and have not reached an age whereby they are seen as rustic or traditional their appearance does not inflate their price.

They also tend to have a reasonable size plot with front and rear gardens and unlike many earlier properties they have a garage, albeit in a separate block. The estates they were built on were often large and had local services like schools built close by making them convenient for families. These factors can help to make 1950s and 60s houses good value for investment.

The Niche Developers Outlook

As with any property strategy the key is understanding in detail what your getting in to and buying right.   Knowing how to spot the problem signs and knowing how to negotiate with vendors and source the right deals, will give you a great advantage over your competition.

If your looking at getting in to property development/investing then check out our other property refurbishment articles here…. and for some fantastic books on property styles, check out Trevor Yorke on amazon.

Or if your serious about property developer, then get the full nitty gritty and step-by-step of how to become a successful property developer in our online property training

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