Conveyancing specialists LMS have reported a record level of lending to homeowners suggesting that many are opting to re-mortgage and improve rather than move.
Figures suggest that total gross mortgage lending has risen two percent to £15billion and 23 percent of the total market now comprises remortgages. A fifth of borrowers are now using the equity released to fund renovations and home improvements – each person remortgaging takes out £22,615 of extra equity, the highest amount per individual since 2012.
Whether adding an extension, converting a garage or loft or adding a garden room the improvements to your home can also increase its market value considerably – indeed careful additions to the home can yield a significant return while providing you with the perfect living space.
"Although the property market has been battered recently, prices will no doubt still continue to rise. Over the long term you’re more than likely to recoup any investment..."
There are a few important considerations if you would like to ensure that the work you undertake will add value to your home – think about features that are likely to entice someone to buy at an asking price but remember that the true fiscal benefit will only be realised by staying within the stock profile of the area and considering the design and its relation to the existing structure.
Setting Your Budget
Budget requirements will vary based on the vision you have for your home but if you believe there is a possibility that you might sell within the next one to five years or the next 10 to 20 then spending £50,000 may not be recoupable if you sold the property within a few months or even years of the completion of the work but you will have enjoyed the brief time you had with the new improvements.
Be wary of the stamp duty threshold, as this can be a difficult barrier to break – if your property is valued at £240,000 and you plan improvement works costing between £15-30K its unlikely that your home will sell beyond £250,000 due to the additional costs incurred for the potential buyer in tax. You may even find that you need to wait for your street or even postcode to break the stamp duty threshold before recouping your investment.
“If you buy a property in the UK over a certain price, you may have to pay a stamp duty land tax (SDLT). This is charged on all purchases of property and may affect your ability to break the ceiling price of property in your local area...”
|Purchase Price Of Poperty||Rate of SDLT|
|Data correct as of 20/08/2013|
|£0 - £125,000||0%|
|£125,001 - £250,000||1%|
|£250,001 - £500,000||3%|
|£500,001 - £1,000,000||4%|
|Over £1,000,000 - £2,000,000||5%|
Types of Space
Consider what is important to you when choosing how you will create room in your property – this will help you decide between a loft conversion or house extension. You’ll need to create a wish list with all of your ideals – whether it’s a larger kitchen, bigger dining room or another bedroom and then you’ll have to calculate the available funding.
After you’ve defined the how you’d like to create room it’s time to call in a professional contractor with experience, such as Extra Room, to help determine whether your desires can be achieved within your budget and if compromises are needed – we often find that the Extra Room required by a client can be achieved using a more cost effective method, knowledge gained throughout years on site and from working with professional designers such as our in-house architectural designer Mikko.
Staying On Trend
People want bigger living spaces, whether you’re looking to connect the garden to the home through the use of glazed screens in a new rear extension or a new kitchen and dining area are on your wish list both occupants and potential buyers often seek the same popular trends so the expense and time taken to create room will often be of benefit not only to your quality of living but also to the re-sale value of your home...