Rennovation loans rise as mortgages fall

August 7th, 2008

An interesting aspect of the current economic downturn was revealed today. New research suggests that 55% of estate agents nationwide have reported an increase in homeowners taking their property off the market in favour of making home improvements.

Lloyds TSB Personal Loans, surveyed 500 UK estate agents and over 1000 home owners to understand how would-be sellers are responding to the cooling housing market. The research was published as the lender reveals a 19 per cent, year on year increase in personal loan applications for home improvement projects.

The findings reveal that 59% of homeowners who had been looking to sell their property have put plans to move on hold due to rising concerns over property prices. Half of those staying put are opting to renovate their existing property instead.

55% plan to undertake improvements to boost chances of a sale in today’s less buoyant market. However, 23% admit they are adapting their property to accommodate changing lifestyle needs and are keen to recoup any potential fall in house prices by adding long term value.

There is obviously a lot of sense in this. As the housing market undergoes a period of instability, increasing the appeal of your house through renovation is more reliable than expecting the value to simply rise because of inexorable market forces.

However, whereas In a buoyant market people taking on a home improvement project could get away with less than perfect preparation or some slapdash sums, in today’s environment it is vital you plan any project thoroughly to ensure maximum return on investment.

Previously, mistakes made in renovation were covered by rising property prices. This is no longer the case.

The survey revealed that the most popular renovations with potential buyers are, in order of preference: a new kitchen, a new bathroom, an extension, a loft conversion and redecoration.

This entry was posted on Thursday, August 7th, 2008 at 2:27 pm and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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