Cost of Renovating vs Building a New Home

A well-executed renovation can increase your home's value, potentially earning you a profit when it’s time to sell. Adding an extension, loft conversion, or a complete remodel can enhance your property by increasing space and improving functionality.

If profit is your goal, avoid making your renovations too personal. Keep an eye on who your buyer is likely to be. The more bespoke your renovations, the narrower your market.

Before diving in, establish that a renovation will definitely increase your property's value. Consult local estate agents about which projects are profitable, make use of their cost calculators, and research average property prices online.

42% of people interested in building their own home believe that finding a suitable plot is one of the biggest obstacles they face. Many self-builders spend at least a year searching for the ideal site.

Plot hunting can be like finding a needle in a haystack, which is why many people choose to stay put and renovate their homes instead. For those who love their neighbourhood, but want additional space or an updated look - a renovation or house extension makes more sense than building new elsewhere.

It's impossible to replicate the authenticity and character of historic properties, so if preserving your home's original features is important to you, choose to renovate.

Protecting period character was a ‘must’ for our clients at our Farragon project. Built in 1898, we took great care to preserve the home's Victorian features. Wall partitions were carefully cut and removed to avoid disturbing ornate cornicing, while the original timber staircase was meticulously repaired. We also restored the decorative woodwork, sash and case windows, stained glass, panelled doors and picture railings.

The home was modernised throughout, including reconfiguring the ground floor layout. Yet Farragon still retains the traditional spirit of a period property.

One of the main arguments for building new is the design freedom it affords – the opportunity to create a home which suits your family and lifestyle.

Building a new home gives you control over how it will look and function. The project can be tailored to meet your needs – from its size and layout, to energy efficiency and parking.

When renovating, the existing structure limits the changes that can be made. While you can certainly move walls, add extensions, and reconfigure floor plans, you won't have the design freedom of a blank canvas.

Energy-efficient homes often come with a higher upfront cost than those built to standard U.K. regulations, primarily due to the need for high-quality materials, certified components and skilled construction professionals. 

For instance, homes built to the Passivhaus standard—recognised as the world's leading low-energy and comfort standard—typically incur costs that are about 4-8% higher.

However, when you consider that a Passivhaus can cut heating bills by 79% compared to homes built to current Scottish regulations, along with lower maintenance costs, reduced carbon emissions, enhanced comfort, health benefits and increased market value – the investment is clearly justified.

Building a Passivhaus is a spend to save approach. By investing now, you’ll save big over the lifetime of your home. Additionally, building a low-energy home is far easier and more efficient than retrofitting an existing one.

If the structural integrity of a property is so poor that it's verging on unsafe, then a knock down and rebuild is likely the way to go.

This was the case with The Arbor House, a modern, minimalist home built by Coldwells Build in 2022. It replaced a dilapidated 19th century stone coach house, which was plagued by chronic damp, rot and woodworm. As a nod to the past, a stone wall from the original building was preserved and incorporated into the home's outdoor colonnade.

Get as much advice as you can before committing to a knockdown and rebuild. Make a pre-planning application enquiry with your local council to find out whether your plans will comply.

The location of your building plot can impact the overall project cost, especially if you're in remote areas like Scottish islands. In places like these, contractors may not be readily available, meaning they have to travel long distances to reach your site. This adds to the costs due to accommodation and travel expenses.

Sloped sites are notorious budget busters, often demanding a split-level home, or extra digging, filling and levelling. It’s worth getting a topographical survey to make informed decisions on house position, access and the amount of groundworks required.

Extremely boggy or rocky ground could bump up costs. A boggy site could lead to drainage issues and may require deeper excavation and filling with imported hardcore. Larger rocks will need breaking up and any surplus removed from site.

If you’ve found a site you want to buy, make sure to include a condition in your offer that lets you assess the ground conditions before finalising the purchase. This way, if the conditions are unsuitable for development, you'll have the option to withdraw from the purchase or renegotiate the price.

Buying a cheap site that needs a long access road worth £40,000 can be a false economy. A level access road over a short distance is more economical.

The availability of services like water, electricity and telecoms/broadband can affect the cost of developing a building plot. If your chosen site isn’t already hooked up to these services, it will cost extra to extend existing connections or install new ones. In rural areas, you might need to invest in a private septic tank or treatment plant if you can't connect to a mains sewerage system.

If you’ve bought an existing building, will it need to be demolished before your new home can be built? If so, this will need to be factored into the cost, along with skip hire and removing waste from site. If asbestos is present, a specialist contractor will be required to remove this safely. Similarly, if you're building on land previously used for agricultural or industrial purposes, there may be contaminated ground. This would mean removing the top layer of earth and disposing of it properly.