Homes that require major structural work can be purchased for £40,000 less than the market average, Direct Line Home Insurance has found.
‘Fixer uppers’, houses needing major works, can be purchased for around 17% less than the market average.
Jeremy Bristow, head of home insurance at Direct Line, said: “Fixer uppers are still a good option for first time buyers and there is still money to be made for those looking for a challenge by renovating a property.
“However, homeowners should keep the costs of major work in mind and ensure they are not taking on too much work.
”Putting your own personal touch on a home can be fun and exciting but complications could lead to a hefty bill.
“With this in mind, renovators should ensure they have a contingency fund in place should they come across any unexpected repairs.”
Houses requiring only minor structural fixes can be purchased for £13,500 (6%) less than the market average for the property.
Estate agents highlight there is still money to be made in flipping properties, with 62% believing buyers can capitalise on price reductions if renovations are required and make a profit even if a house requires structural work.
However, there are considerations depending on the area, as one estate agent in Bristol noted that stamp duty has eroded the value of profits with higher value properties.
When planning to add value to a property, homeowners can boost the resale price by £9,980 on average by redecorating every room.
The best single room to renovate is the kitchen, which alone can add £9,275 to the value of the property. Renovating the bathroom on a property can add £7,532 to its value.