Home improvement

Homeowners planning for comfort ahead of value

12 May 2009

Homeowners now looking to improve their property's comfort ahead of its value

A new study of Britain's homeowners1 by AA Personal Loans reveals a quarter of the nation's homes are set to increase in size before the end of the recession.

Changes in the way the homeowners are using their living spaces will see the standard floor plan of a house change dramatically with almost one in four (24%) of renovated homes growing by an extra room. As house prices have on average dropped by almost 10%2, it seems homeowners are putting their own needs above resale value and taking a longer term view of their property by treating their properties as homes rather than an investment.

Of those hoping to build an extension to add a new room to their property, one of the most popular choices of room was one for entertaining, with almost a quarter (23%) looking to build one and a sixth (15%) intending to use their new extension as an office.

While the function of the rooms is clearly different, both hint at a more domestic than economic purpose: whether it is homeowners looking to do their entertaining at home, or preparing a room to allow working from home; both improvements can be seen as a result of the economic climate.

Comfort rather than value

The AA Personal Loans study also reveals that almost five million people have decided against selling their home in the face of recession3 while over six million will definitely be renovating their property within the next 12 months4.

When asked why they were making improvements, almost six in ten homeowners (57%) responded that their motivation was to create a nicer living environment. Conversely, just half that – three in ten (32%) – are renovating their home to add value to it.

Regional variations


Entertainment in the South East, bedrooms in the North, and home offices in Scotland

What homeowners are building however depends on where they live in the UK. In the South East, entertaining is high on the agenda with around three out of ten homeowners in each of Southampton (30%), Brighton (33%) and London (28%) all aiming to add a new room for home entertainment purposes.

Meanwhile, further north the focus shifts to additional bedrooms. In Leeds, half of homeowners (49%) building an extension are doing so to add extra sleeping quarters. The story is the same in Liverpool (45%) and Manchester (28%) with a similarly high number of owners constructing extra bedrooms.

However, in Scotland many property owners are looking to build themselves dedicated work space. This is particularly so in Glasgow where one in four (25%) of homeowners are set to add a home office, but also in Aberdeen (22%) and Edinburgh (20%).

Comment

Mark Burgess, editor of Estate Agency Times says: "Even though the nation is collectively tightening its belt as the recession rolls on, it's not that surprising that many homeowners are bucking the trend by taking out home improvement loans to renovate their properties.

"Understandably some people might not be keen to take out a personal loan at the moment, but additional bedrooms or reception rooms typically add the most value to a property and both can easily serve as an office, something that will benefit many who are changing their working habits.

"Providing you are able to keep up with loan repayments, now is one of the best times to make home improvements. Not only are labour costs more competitive but extending a property during the downturn will not only add value long term but also make the property more comfortable for day to life."

Mark Huggins, Head of AA Personal Loans, comments: "Although many would expect demand for home improvement loans to be less during the recession, our figures show that their popularity is actually unchanged. As long as the recession keeps impacting property values, we're not expecting that to change as homeowners continue to make improvements, albeit for their own needs, not necessarily the needs of a future owner.

"Building an extension may involve a significant outlay to start with however, in the short term owners will be making their property more comfortable for themselves and in the long term they are adding value; in this way, such renovations effectively kill two birds with one stone.

"Whether it's new fixtures and fittings, a new bathroom or even an extension, AA Personal Loans has a strong reputation for providing home improvement loans with competitive interest rates."

factfile

1Survey of 2000 people carried out by OnePoll in March 2009

2http://www.hometrack.co.uk

3Percentage of homeowners not moving because of recession (20%) multiplied by number of UK homeowners (24,479,439 - ONS)

4Percentage of homeowners definitely renovating their property multiplied (25%) by number of UK homeowners

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12 May 2009