Renovation and Decoration Affects Prices, A Guide for First Time Buyers, Plus More

Welcome to the March edition of the Town & Country Newsletter!

This month we investigate how renovation and decoration can affect the price of your home, we rank the nation's favourite home feature, we take a look at how property values are set to change over 2017 and we offer a guide for first time buyers.

UK Homeowners: Renovations and Decorations Ups Price of the Home

 More than 9 out of 10 UK homeowners believe that renovations and decoration can increase the value of a property, according to the results of a recent survey.

The study conducted by Co-Op Insurance found that 91% of those asked thought the price of their home had gone up. It was also discovered that they believe renovation and decoration work were accountable for a &14,900 rise in the value of a property.

Additionally, the research found that 31% of homeowners purchase property, with the aim of gaining money from their investment.

Location proved to be a key deciding factor for many, with 34% choosing to buy in an area that’s desirable, and 32% said they went away and did research before buying in an area that was dubbed “up and coming”. 29% of people bought a home that was in clear need of some form of renovation.

62% of homeowners relied on a general increase in house prices as a way to make a profit on their property.

Many of the homeowners had changes on the mind before they moved on, with 76% of those asked, saying they made changes to their property since moving in, with 60% of those who completed the changes saying they believe it added value to their property.

On average however, homeowners who have made changes to their property paid out over &18,000 on renovations, but only see a &14,900 rise in the value.

‘Our study shows that home owners believe by investing in décor and bigger renovation works they are adding value to their homes for future years,’ said Caroline Hunter, head of Home Insurance at Co-op.

‘Kitchens have long been lauded as the heart of the home and our study continues to solidify this, with over half of home owners believing that this is the room of the house that could make, or break, a sale,’ she pointed out.

‘Whilst they are a big draw for prospective buyers, they can be expensive, therefore it’s important to revisit your home insurance policy to ensure you have the right level of cover in place during the building works, to protect you from additional risks during the work. Don’t assume your builder will have insurance in place that covers you in every eventuality,’ she added.

It is worth thinking long and hard before making any serious changes. A different study revealed that 25% of homeowners regretted their decision, with an additional 29% saying they’re too scared to make changes.

Which Home Feature Influences Prospective Buyers?

According to a recent survey, almost half of prospective buyers are most influenced by a new kitchen when buying a new home, with an additional 28% would be prepared to offer a higher price as a result.

Following closely behind is a new bathroom, which would influence 46% of home-hunters with a quarter of those saying they would pay a higher price tag.

Surprisingly, new windows were ranked third most important, however, as a reason for upping the price, a new extension was more important.



The level of desirability appears to depend mostly on how practical a feature is. New windows, loft insulation and boiler are all useful features which can contribute to keeping a home more comfortable and keep your energy bills down.

Whilst the results are mostly for fun, it’s extremely helpful for those thinking about renovating their home or for those looking to gauge what prospective buyers are currently interested in when it comes to property.

 

 

 

3.5% Growth in UK House Prices Predicted for 2017

 Recent analysis of past property market trends has forecasted a slowdown in UK price rises, but an overall rise in 2017.

This research was carried out by economists of the Housing Market Observatory at Lancaster University Management School and looked into property market performance since 2015. The objective of this research was to improve our understanding of the UK national and regional housing markets.

The study used quite a wide variety of factors at both regional and national level to reach its conclusion. This included factors such as the unemployment rate, price to income ratio, the number of housing starts and other variables to help best predict future trends.

The results of this research predicted a growth of 3.5% across the year and while this is a slight fall from the 4.4% rise in 2016, it is still an indication of a solid economic outlook for the UK property market.

This predicted increase in house prices does of course vary by region, however, it is expected that all regions will see growth this year.

As expected, the capital of England is forecasted to see a slightly higher rise than the national average. London is forecasted to see a slowdown in housing inflation up until Q2 of 2017, but price rises are expected to gather pace towards the end of the year to reach an overall increase of 3.9% for 2017.

East Anglia is the clear standout form this report, as the current growth leader by region and it is predicted to stay that way with the region likely to see a 5.7% jump in house prices this year.

There were suggestions from economists last year that the UK property market may see a price crash in 2017, however, the recent analysis from Lancaster University states that low mortgage rates and sound domestic economic conditions should prevent a sharp fall in prices, and growth in house values should gather momentum towards the tail end of 2017.

A Guide for First Time Buyers

 The housing market is an inhospitable place for young first time buyers. It requires a dedication to an end goal that borders on single minded and many sacrifices along the way. Are young people up to the challenge?

Getting Started
Save: It’s a simple first step, but it’s the one that most buyers struggle with the most. Putting a little away here and there simply won’t cut it, you need to be consistently squirreling away money, sacrificing holidays and big money spends, in an attempt to scrape your deposit together.

Fortunately, there is help out there. Do some research and find a savings account with the best interest rate. The most popular savings account for first time buyers at the moment is the Help to Buy ISA.

This account allows you to make monthly deposits of up to &200 until you either buy your first home or reach the &12,000 limit. Once you actually purchase a home, you can use the savings from your Help to Buy ISA towards the deposit and after the sale is complete you will a 25% bonus from the government. For example, if you had &12,000 saved, you would receive a &3,000 bonus after completion.

What are your options?
0% mortgage: A 0% mortgage is similar to a 5% mortgage, in that a guarantor must put forward 10% of the deposit, whilst you put down nothing. The guarantor will receive the cash back, provided you keep up with the mortgage repayments.

Rent to Buy: Rent to Buy is a new scheme that allows you to choose a home that you will one day buy, and pay a reduced rent (80%) so you can save the other 20% for a deposit. Once you enter the scheme, it lasts for five years. During that time you can buy the property, or you can pay for a 25% or 75% share of the property.

Starter Homes: Starter homes are a new scheme designed to encourage first time buyers and property developers to come together in aid of the property market. First time buyers between the ages of 23-40 can apply to be a part of the scheme. They will essentially be given a 20% discount on the value of a new build home up to the value of &250,000.

Bank of Mum and Dad: When all else fails, what better place to go than the good old reliable bank of mum and dad. Many of the options above require your parents to act as a guarantor anyway, so why not just go straight to the source?

Whilst it might seem daunting to begin saving for a property, there are many options that can help you take your first tentative steps onto the property ladder. Do some research and find out which options suit you best.