Over the last five years homeowners have spent a hefty total of £41bn doing up their homes – an average of £1,875 each, according to NAEA Propertymark. There is a growing trend for home owners to improve their current homes instead of climbing up the property ladder.
Nearly three quarters (73%) of all homeowners have done work to their homes in the last five years. The most popular improvements were redecorating (73%), over half landscaped the garden (54%), over one third added new flooring (39%) and nearly one in three refreshed the bathroom (31%).
This doer-upper era has come from growing house prices making it increasingly difficult to move up the ladder – one in 10 homeowners making improvements do so because the price of moving is too expensive. Homeowners, instead, are looking to add value to what is already theirs.
With a conservatory typically costing £4,310 and extending into the loft or basement costing around £3,244, home improvements can be a lower cost alternative to moving house. The majority of those who have made improvements did so to improve the look of their home while a quarter did so as an investment to add value.
Should I remortgage my property to make home improvements?
Remortgaging could be a good option for you if you wish to capital raise to make your home improvements. Renovating, extending or converting your home can add value for when you decide to sell up and move on. According to Barclays an average of £14,000 return on investment can be made by building a 30 square metre extension in the UK. If you were to do this in London, this would be a staggering average return investment of £156,000.
So, if you have some equity in your home and are considering making changes to your property, then remortgaging to raise capital could be an option for you. But, it is important to seek advice from your adviser before making a decision so you can assess if this decision is right for you.
So, what to do next? If you have made major home improvements, it is likely that the value of your home will have increased. This means it is a great time to remortgage to get a better mortgage deal that could reduce your monthly mortgage payments.
Is climbing the ladder really too expensive?
Despite the upwards trend of homeowners making improvements instead of trying to move up the property ladder there are many options available to help you keep on climbing.
So whether you’re ready to take the next step, or just want to find out more about what options are open to you, contact your adviser today to arrange a meeting.