Research shows there has been a 400% increase in the number of people improving their homes over moving in the last five years.
More people now are looking at clever ways to alter their existing property to meet their changing needs. This could be extra space for a growing family or a home office.
The study, involving 1,200 homeowners, showed the trend was being driven by several factors. These included: the flat property market, uncertainty over Brexit and concerns about interest rate rises.
We recently published several articles on Brexit related mortgage news and deals. You can find them here on our news website:
- Brexit’s Delivering Bargain Remortgaging Deals Right Now
- Why Brexit makes Now a Shrewd Time to Remortgage
The research is backed by another study. It showed that more than 50% of homeowners would opt for home improvements over moving. Most people in this study cited high house prices and stamp duty as their reasons for staying put.
Going Down the Home Improvement Route
What are the most frequent home improvements that people take on? They are: kitchen conversions, bathroom revamps, and loft and garage extensions.
A loft conversion, done well, will add 10% to 12.5% to the value of your home. It’s usually a simple way to add an extra bedroom or two to your home – and perhaps an ensuite bathroom too.
A kitchen extension has a potential value add of 15%. It also allows you to gain functional living space. It means you can, for example, turn your cooking preparation room into a kitchen-diner.
It’s the bigger home improvement projects that add the most value to your home. Providing, that is, the build cost per square foot is less than the price per square foot of the area.
Any project needs to be planned and budgeted carefully for before you work out how you are going to fund it.
It’s always wise to get professional estimates for how much the renovations will cost. Also on your list should be the following: the cost of architect’s plans, planning permission and building regulation inspections. Then add on the actual build costs.
There are various ways in which you can fund home improvements. The choice will depend on the cost of the project and your financial situation.
These include borrowing on your credit card, taking out a home improvement loan, equity release or remortgaging.
But, with interest rates at an all-time low, remortgaging to extend right now can be a very efficient way to release funds.
Remortgaging to extend your home is a good choice if you have enough equity in the property. In other words, your mortgage is low compared to your home’s market value. In this case, you can remortgage for more and take out some of the equity in cash.
The lower your remortgaging loan-to-value (LTV), the better the remortgaging deal you’re likely to get.
Your first step is to find out much your home has increased in value. Then try to not increase your loan-to-value (LTV) ratio. Do this by borrowing proportionally with how much your property has increased in value.
The remortgaging deals currently available are some of the lowest in the last 10 years. This means that you may be able to release equity and find that your monthly repayments remain the same or increase very little.
Best of all, you can do so in the knowledge that the home improvement project is in itself an investment in your home’s value.
If you need help in finding the right remortgaging product for you, we’ll be happy to help you here.
Last, but not least, all of us at the Mortgage Advice Services Team wish You and Your Family and Friends a Happy New Year.