Renovation cost categories that close the gap
Rewire (£5k to £10k for a 4-bed). Full replumb plus boiler (£8k to £15k). Retrofit cavity-fill, EWI or IWI, plus roof insulation (£15k to £35k). Structural openings for open-plan ground floor (£8k to £18k each). Replacement glazing with thermal bridge detailing (£15k to £30k). Add it up and a 200 sqm reno regularly clears £400k before fit-out.
VAT treatment
Renovation is standard-rated at 20% in general[HMRC 708]. 5% reduced rate applies to qualifying empty homes (typically vacant 2+ years) and to changes-in-number-of-dwellings; KDR is zero-rated. Most owner-occupied renovations pay 20%.
When renovation is forced
Listed buildings, conservation areas, strong local-plan policy protecting interwar housing stock, and any mortgage that cannot be vacated for the build period. Otherwise the math leans KDR above 130 sqm of new floor area.