24 Feb 09 Housing Market Vs Home Improvements
Home Improvement
According to the council of mortgage lenders, gross lending on mortgages has decreased by a massive 52% since January 2008 while Sainsbury’s Finance records a whopping 24% increase in home improvement loans with approximately 425,000 loans said to be worth over £4 billion in the same time frame.
Many UK citizens are opting to remain in their existing properties and make improvements rather than selling. The improvements are thought to be more about tailoring their home to meet personal tastes, needs and comfort rather than to improve the property value. This is due to a decision by many to ‘stay put’ and make the best of what they already have. Improvements may include building extensions, adding on conservatories, converting attics etc.
All of these things can increase the living space without the hassle of moving home, especially during a period when the housing market is so unstable.
Steven Baillie, Head of Loans at Sainsbury’s, said: “It is well-documented that the housing market struggled last year, and our figures might suggest that people have decided to stay put and make the most of their existing homes.
It may also suggest however that they’re trying to add value to their current homes in order to get a better price for them when the property market recovers.
If people do decide that they need a loan to pay for their home improvements such as a new conservatory or kitchen, they should make sure they look around for the best rates on the market, which could save them a considerable amount in repayments.
Many buyers who bought while prices were high are now finding themselves in negative equity situations resulting in a need to remain or risk losing thousands when they sell. This is bad news for property developers who bought to sell hoping to make profits from minor and major improvements in what they thought then was an ever-expanding market. They may find themselves moving into property they had no intention of living in or renting them out at a loss.
Halifax does report however that the average house price went up in January by 1.9 per cent and this is believed to be the reason Estate Agents are reporting an increase in sales to an average of 2 properties a week compared to less than one before Christmas. Buyers are urged to remain cautious, as this price increase could be a temporary trend.
Tags: home improvements, loan, mortgages, property market
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The property market for both sellers and buyers (as they cant get the money) is dire, doesn’t surprise me that home improvements are on the increase.