I dealt with all this back when I worked construction (in the Northeast US). You tear it all out and leave the base structure, ensure the outside is weather-ti

I dealt with all this back when I worked construction (in the Northeast US). You tear it all out and leave the base structure, ensure the outside is weather-tight, install new windows, run new electrical and plumbing to modern standards and slap modern insulation and drywall up. Accessibility except in the most extreme cases can generally screw off unless it's a commercial building or going to be occupied by tenants in which case widening door ways and moving staircases really isn't a big deal when the place is gutted. In practice this means that most inspectors will not bust out the tape measure for a single family dwelling unless things are obviously pushing the limits of reasonableness or it is a totally new structure. This approach is usually cheaper than new construction since you don't need to construct a new structure (if your roof/siding/windows are good you can also save money by keeping those). This approach also can side step a lot of permitting requirements since your keeping the original structure. A full rebuild tends to not make financial sense when the property is going to be commercial (and the existing structure is not sufficient) or rental in which case knocking down and building as much square footage as you can justify is the way to go. For a single family home or commercial structure already of adequate form factor a full rebuild often makes sense. Like anything else you've gotta run the numbers for your specific situation. The pitfalls you are mentioning are only of consequence when you have particularly micro-managerial regulation specifying you must retain outdated materials and interior systems (as the guy from Ireland describes in a different comment).