Tuesday, August 19th, 2008
Householders worried about the credit crunch are taking their homes off their market and improving their kitchens instead, according to two new surveys.
A Lloyds TSB study of more than 1000 homeowners and 500 estate agents found that new kitchens and bathrooms were best at boosting a property’s value, ahead of building an extension. The least successful tactics are redecoration and a loft conversion.
And, in a separate survey, insurance company Liverpool Victoria found that almost a third of people who plan some sort of improvement to their home – more than 4 million in all – intend to re-do their kitchen.
Both surveys concluded that homes were being taken off the market by owners who don’t want to risk the current economic climate.
Property TV presenter Phil Spencer said: “The current cooling of the property market is making homeowners think twice about selling up and many are opting to improve instead.”
More than half of the estate agents spoken to be Lloyds TSB had experienced customers pulling out of selling their homes and deciding to improve them instead.
Almost 60 per cent of the 1000+ householders it spoke to said they’d cancelled plans to sell – and half of those plan to do their home up instead.
Many of those are having to do work that will make it easier to stay in a house that no longer meets their needs, but rather more are hoping to increase the value for a future sale.
Lloyds TSB’s director of personal loans, David Wishart, said the bank had seen a recent increase in home improvement personal loan requests.
He said: “For the last decade homeowners have been able to sit back and rely on rising property prices to increase the equity in their home but sadly this is no longer possible.
“If you want to trade up and avoid substantially increasing your mortgage, you’ll need to add value to the house you’re currently in.”
And Liverpool Victoria (LV) found that more than £4bn is being spent on home improvements during the current 18-month period by people who have changed their minds about selling.
Average spend is likely to be about £5000 – but almost half the householders surveyed plan to save money by either doing the work themselves or bringing in family members.
LV spokesperson Emma Holyer said: “Despite the challenging housing market and lack of affordable mortgages, we are still a nation obsessed with our homes and what money we can make on them.
“Many homeowners told us they were spending this money so they could profit more on their homes when they do come to sell them after the market has stabilised. This shows that although people are concerned about the short term housing market there does appear to be optimism in the long term.”