Most Popular Property Improvements and How to Finance Them

According to new research, 69% of homeowners intend to improve their property within the next year. What are the most popular changes, why are they making them, and how could you finance improvements to your own home or buy to let investments?

Why make improvements to your property?

The research shows that half of those looking to improve their home want to enhance its appearance, and 44% want to improve their living space. While we sincerely hope pandemic lockdowns are a thing of the past, the pandemic significantly shifted people’s priorities regarding living spaces. Many are looking to reconfigure the space they have to work better for them, whether for family time or working from home spaces.

Unsurprisingly, given the current cost-of-living crisis, 23% said that decreasing household bills is their primary motivation. Furthermore, 17% specifically want to improve their property’s EPC rating. Around 58% of homes in England and 63% in Wales with an EPC rating lower than C (ONS), which, considering buildings contribute to 40% of the UK’s carbon footprint, poses a significant challenge for the Government’s net-zero targets for 2050.

What improvements are property owners making?

According to the research by Censuswide, the majority (58%) are looking to make cosmetic improvements through painting and decorating, and around a quarter would like to fit a new bathroom. However, 26% intend to make their property more energy-efficient with changes such as new double or triple glazing (16%), energy-efficient fittings (14%), loft insulation, and solar panels (11%).

What can landlords take from this research on home improvements?

While these results are based on homeowner opinion, aesthetic improvements will likely attract tenants and encourage them to stay longer in rental properties. While relatively inexpensive, decorating can quickly make a property feel newer and more cared for, and ultimately a nicer place to live for your tenants (existing or prospective). Depending on the scale of the improvements, you might even be able to charge more rent for a newly modernised property! Furthermore, with the Government’s Decent Homes Standard extending to PRS property, landlords will need to think about ensuring their properties are up to a modern standard or risk being deemed unlettable in the near future. Besides painting, replacing carpets and kitchen cupboards is a quick way to freshen up and modernise a space, and doesn’t cost as much as full renovations.

Due to rising energy costs, it makes sense that many people are looking for ways to reduce bills. This motivation is not exclusive to homeowners; renters face the same financial challenges, whether paying bills directly or included in monthly rent. Changes to EPC regulations for rental properties are another reason landlords should consider energy-efficient measures. Whilst there’s no doubt that these will likely cost more at the outset, reduced bills and greater tenant demand for greener properties, plus the opportunity for cheaper ‘green’ BTL mortgage rates, should make the investment worth it long-term. And ultimately, property investment is a long-term business.

How to fund property improvements

There are several options for homeowners and landlords alike when funding small-scale property improvements, and it’s easier than you might think! Importantly, these don’t require your personal or business savings.

Capital Raise: If you’re looking to remortgage in the near future (or have an unencumbered property you could mortgage now), releasing equity from the property via a capital raise is a popular and relatively simple way to fund improvements.

Further Advance: If you’re not ready to remortgage or would be stung by hefty Early Repayment Charges (ERCs) if you did, then a small additional loan from your existing lender might be an option for you. Then, when it is time to remortgage, you can consolidate the outstanding further advance back into your main mortgage amount.

Second-Charge: If your existing mortgage lender doesn’t offer further advances (as not all of them do), a second-charge mortgage might be an option for you. This is an additional loan with a different lender secured against your property, based on the available equity. While these are slightly more complicated than further advances or capital raises, a specialist mortgage broker like Mortgages for Business will be able to help you.

If you’re looking to make improvements to your home or investment properties, we can help. To assess your options and see how much you could afford to put towards your project, give us a call on 0345 345 6788 or submit an enquiry today.

Source: Censuswide.

21st June 2022