The 70% rule for UK property investors
The 70% rule is a back-of-the-envelope filter for refurb deals: don't pay more than 70% of the end value, minus the refurb cost. It won't decide a deal for you, but it's a fast way to bin the obvious non-starters.
The formula
Maximum offer = (70% × GDV) − refurb cost. So on a property worth £200,000 done, needing £30,000 of work, the rule suggests paying no more than £110,000 (£140,000 minus £30,000). The 30% gap is there to absorb buying costs, finance, selling or refinancing costs, and your profit or equity.
Worked example
GDV £200,000; refurb £30,000.
70% of GDV = £140,000.
Maximum offer = £140,000 − £30,000 = £110,000.
Where it works — and where it doesn't
As a first-glance filter it's excellent: if the asking price is miles above the 70% number, move on. But it's deliberately crude. In high-value, low-yield areas the margin can be thinner and still work; in cheaper, higher-yield areas you may want a wider buffer. It also says nothing about cash flow once let, which is what really matters for a buy-to-refinance hold.
Treat it as a screen, not a verdict. Once a deal passes the 70% check, run the full numbers — value, costs, finance and exit — before you offer.
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Guidance only. BrickCrunch provides general information, not financial, tax or legal advice. Always confirm figures and your own position before acting.