Revealed: The Most Profitable Home Improvements

In this month's edition, vendors and buyers are returning to the property market, the most valuable home improvements have been revealed and we tell you what to consider when buying a second home.

Vendors and Buyers Return to the Market

 

 

Although activity on the property market was sluggish at the beginning of 2018, recent reports from the National Association of Estate Agents (NAEA) indicates a rise in activity in the last few months – from both vendors and buyers.

An increase in market movement is by no means a surprise during the warmer months.

Figures from the NAEA's latest housing report found that, on average, UK estate agents had 33 homes available for sale in April, a number that rose by 12% to 37 homes per branch in May.

Whilst this recent market activity only accounts for a third of the activity seen in 2008, that being of 97 homes per branch, nonetheless, these figures are still a welcome sign as demand has continued to greatly outpace supply over recent years.

As expected, demand is still on the rise as the recorded number of prospective buyers per branch saw a modest jump of 337 in April to 351 in May. In comparison, May 2016 recorded 304 buyers per branch, showing a steady increase.

The report also found that the number of sales agreed remained static, with both April and May recording eight sales per branch, a figure that is down by two in comparison to 2017.

It was also revealed that the percentage of property sales going to first-time buyers has seen little change, with approximately one in four properties being sold to those taking their first step onto the property ladder.

Commenting on these statistics, Chief Executive of the NAEA – Mark Hayward – said that vendors and buyers are “hoping to get everything tied up so they can enjoy their summer holidays without worrying about viewings.

“But those willing to be more flexible might do well to hold off until the market’s quieter in July and August.”

“Not everyone heads abroad over the summer, with lots of people opting for winter sun instead, so while the market is undoubtedly quieter, competition is a little less intense, which might better suit some buyers and sellers”.

Revealed: Most Profitable Home Improvements

 

If you’re a homeowner, then there is a strong chance that you’ve mulled over your options regarding any renovations and/or improvements that you could make to your home and researched just how much they might cost.

Whilst it’s likely you’ll assume that these improvements would always add to a property's value, not all changes are as profitable as you may think, and some renovations could even negatively impact your home’s price tag.

Measuring against the average property value in the UK (£225,621), GoCompare Home Insurance set out to discover the average cost of some of the most common home improvements and how they could affect a home’s value once completed.

According to their research, the most profitable upgrade to a home is installing a brand-new boiler. Although this may set you back by £1,995, it is estimated that this could increase the home's value by £9,024, which is a huge profit of £7,029.

Costing a considerable amount more but adding the same amount to a home's value is central heating. Installing a new system will add £9,024 to the property’s price tag, but it will cost you approximately £4,250.

In third place for most profitable improvements, knocking through rooms was found to cost an average of £1,750, and lead to an increase in value by £4,512.

Surprisingly, installing solar panels was shown to have the largest negative impact on a home's value. Costing energy-conscious homeowners an average of £5,000 whilst knocking £4,512 off the overall property value. Whilst you may recoup some of these losses in the savings on your power bills, it seems that not everyone is a fan.

Henry Pryor, a property buyer who conducted the research, offered his advice on the best way to approach improving your home, “Most buyers prefer to pay for the opportunity to be able to add an attic conversion, kitchen extension or convert a basement. Getting planning permission to do the work is frequently the best investment you can make leaving the actual choice of layout, decoration and equipment to the next owner.”

“Improving the green credentials of a house usually pays, such as a new boiler, insulation or energy saving measures along with security improvements will usually pay off but some additions like solar panels will be hard to get a payback on immediately”.

 

Buying a Second Home: What to Consider

 

Whether it’s a little country escape, a place by the sea or even somewhere abroad, who wouldn’t love a home away from home?

Whilst this may be a lovely daydream, the reality of owning more than one property can be complicated, with several extra factors to consider before making your dream a reality. We’ve put together some facts you should consider before taking the leap into second home ownership.

Why do I need this property?

You will need to have a serious heart-to-heart with yourself and your other half about the purpose of buying your second property.

It is important to bear in mind that you will need to go through the stressful process of buying a home, with the added stress of the property not being in your local area, as well as furnishing and decorating the property, and the end result is you own a property you will probably only visit a handful of times each year.

There are other options available to you depending on what your needs are, for example, if you’re dreaming of a holiday home why not look into a timeshare? Or if you’re a professional looking for accommodation in the city, you could consider renting.

Location, location, location

The location of your property will affect every aspect of your ownership. Whilst it is lovely to have a home that’s 150 miles away from all of the day to day stress, that’s a 300-mile round trip every time you’re looking to visit.

If you are considering a holiday home and would like to act as a landlord when you aren’t occupying the property, then you will need to consider how you will keep tabs on the property when you are so far away. Little details like finding trustworthy tradesman become more complicated when you don’t know the area.

You should also consider whether you know the area you’re looking to buy in well enough before you finalise anything. For example, cheap property in the city might be in a student area. It’s worth doing some research before making the move.

The cost of running your second home

You will also need to consider the cost of running your second home. You will need home insurance, broadband, telephone, electricity, water and heating as well as paying the various taxes that come with owning property.

Whilst you won’t be paying the same rates (because you won’t be there all the time) however, certain bills (like the internet) will stay at the same rate no matter the amount of usage you get from the service.

You will also need to consider taking steps like keeping your heating on during the winter so that the pipes don’t freeze.

Mortgage

Second homes are not exempt from taxes like stamp duty and capital gains tax, which will add to the cost of purchasing your property. You will also have to decide whether to take a loan for your property or to remortgage your main home.

For any help or advice when it comes to property, speak to us. Our team would be more than happy to help you with the right information to get you started and can help you find a home to suit your needs.