Renovate vs rebuild

Expert tips to help you decide

When does it make more sense to knock down a property and rebuild it instead of renovating?

Considering buying a house that needs major work? Want to turn a wreck into your dream home? Before you decide to invest in a property that needs significant renovating or a complete rebuild, there are lots of factors to take into account – from cost implications to environmental concerns.


Renovating a building is not a minor project, but demolishing it and rebuilding is a major undertaking. Unless you’re able to fund the project yourself, it’s vital to get the finance in place before you make any firm commitments to buy. Talk to your mortgage provider for guidance before you take any action, whether you’re thinking of renovating or rebuilding. There may be specialist lenders who will consider funding rebuilds (in a similar way to a self-build), but this may well be at higher interest rates than standard mortgage loans and with additional fees.

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Practical considerations

Expert tips to help you decide to knock down a property and rebuild it instead of renovating?

“Start by looking at the structural integrity of the building,” says Annie Summun of construction firm Kisiel Group. “If the structure is poor and it needs underpinning or it’s been badly repaired, it may be better to knock it down and start again.” If this is the case, however, it’s crucial to find out from experts whether it’s viable to demolish and rebuild. 

Chartered building surveyor Tim Davies says: “Speak to a local surveyor before you make that purchase and get pre-survey advice on the pitfalls. They may have done surveys on the property in the past and can tell you if it’s riddled with damp and woodworm. Then commission a thorough survey to establish how much it will cost to bring it into a habitable condition.”

It’s vital to do your homework before you commit financially to a project, especially if you want to rebuild, adds John Daborn of JJ Renovations: “Get as much advice as you can, and be sure to seek pre-planning application advice from your local council to find out what they will accept before you buy. They could say, ‘You can’t rebuild, you can only renovate’, and that could help you decide which route to go down.”

Whatever you decide, you may want to establish that your project will increase the property’s value before you go ahead. You can find out what adds value by talking to local estate agents and reviewing average house prices on online property sites.

“If someone does a really nice refurbishment, it may be worth every bit as much as a new build,” says Tim Whitmey from Savills London Residential Development Department. “But if you knock down a character cottage and replace it with something not very good or out of keeping with the area, it might come back and bite you because there may not be a market for it.”

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Comparative costs

Costs can vary considerably depending on what work you’re planning. John Daborn says: “In general, a complete renovation can be more expensive than a rebuild because you have to strip everything out before putting it back. Rebuilding from scratch usually costs less.”

Bear in mind that if you’re knocking down an existing property, you will also have to pay for demolition costs, and rates vary widely. You’ll also need to factor this into your timings and consider the extra disruption to your neighbours.

Builders working on a new build will not need to charge VAT on labour or building materials as long as it’s genuinely new. It has to fulfil various criteria. For example, if a newly built extension cannot be sold separately from the main house, the VAT exemption won’t apply and your builder will charge 20% VAT.

“Don’t underestimate the cost of planning,” advises Mike Dade of Speer Dade Planning Consultants. “Planning application fees for a new dwelling differ depending on whether you’re in England, Wales, Scotland or Northern Ireland; and pre-application fees vary from council to council and depending on what level of advice you need.”

A renovation, extension or new build can cost less if you do some work yourself, but call in a professional if you don’t feel confident doing particular jobs like plumbing, and don’t underestimate the workload.

Homeowner Henry Collinge is project-managing the 36-month renovation of his 16th-century farmhouse in Norfolk. “It was in a dilapidated state and everything needed doing,” he says. “The first time it rained, we had a waterfall coming through the roof! The roofer was with us for three months. Doing the project management is taking a lot more time and effort than I thought.”

When budgeting, homeowners embarking on a renovation or rebuild should keep aside a contingency of around 5-10% – more if the property is listed, suggests Annie Summun. “Everything costs more than you think because you come across unexpected issues,” says Henry. “We discovered the chimney was unsupported. It was held up by tiles! To put in lintels cost an unforeseen £1,000.”

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Environmental impact

Although demolishing and rebuilding a property often requires more energy than renovating it, you could make long-term energy efficiency gains by rebuilding.

“You can upgrade an old house, but there are limitations,” says John Daborn. “A Victorian brick house without cavity walls is a disadvantage if you want the heat retention you get on a new build. You can put in internal insulation, but it costs more to insulate than a cavity wall and it’ll make your rooms smaller.”

Annie Summun recommends getting a feasibility study done to assess the viability of the project, including specialist reports on conservation and environmental considerations. A chartered surveyor can help you arrange this. “If there are listed trees, you have to allow for roots not being damaged – you may need special netting to protect them and a zone around them, for example. Or there may be protected species like bats on the property, which need surveying.” See our article Confessions of a surveyor for more information on using a surveyor.

Remember, replacing an old house with a new energy-efficient dwelling won’t be enough to sway a planning application. “Although you may get brownie points because you’re going in the right direction,” says Mike Dade.

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Regulatory restrictions

Building regulations approval in England, or a building warrant in Scotland, is needed if you’re building or altering a property. The regulations include guidelines on complying with everything from structure to electrics. You can apply for approval from your council, in which case the fees are usually published on their website, or through a private approved inspector who will negotiate fees directly with you.

You’ll also need full planning permission to rebuild, and for some renovations if they’re extensive. (Take a look at the Extensions Beginners Guide at online magazine Homebuilding & Renovating for some useful tips1.) A listed property cannot be demolished but, even if a house is not listed, it may not be possible to knock it down.

“If a tumbledown site is considered to have some value as a ‘heritage asset’, the council could resist demolition on that basis,” says Mike Dade. “That’s why it’s important to bring in the planner right at the start, even before an architect is involved.”

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Useful contacts

Speak to your council’s planning department to find out what they’ll agree to, and to builders for an estimation of a project’s cost. You can find recommended tradespeople and experts through the Federation of Master Builders2, the Royal Institute of British Architects3 and the Royal Institution of Chartered Surveyors4.

It’s also important to speak to your insurance provider to make sure you’re covered throughout any renovation or rebuild project.

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Important information

  1. Building an extension: a beginner’s guide, homebuilding.co.uk
  2. fmb.org.uk
  3. architecture.com
  4. rics.org/uk