Renovation and Reinvesting are the Name of the Game. It Makes More Financial Sense Than Moving at Present

The property market in the UK continues to struggle with a lack of mortgage finance, a shortage of buyers and prices continuing to fall.  So, it’s no surprise that many homeowners have scrapped plans to move and have instead remortgaged in order to improve their properties.  If you have space for a conservatory or extension or if you have an unused garage or loft that you could convert then you could add significant value to your home.  And, a remortgage can be the perfect way of raising the cash you need to complete the work.

A Lack of Active Buyers: Maybe you are finding it difficult to locate a prospective buyer for your home.  If one of the principal reasons for you deciding to sell was to add more space, perhaps because your family has grown, then renovating with a remortgage could be a viable option for you.  Enlarging your family’s property could give you the space for a bigger kitchen, a new dining room or an extra bedroom, and eliminate the need for a move in the first place.

Jason Orme, editor of Home Building and Renovating Magazine, believes that there could be ‘in the region of 100,000 to 200,000 projects undertaken each year’ as more and more Brits decide to stay put and refurbish or renovate their homes.

Each project is different, so timescales and budget vary enormously, and factors  affecting price might include the location and condition of the property, or the actual type of property you live in, as well as the specific type of renovation you are hoping to undertake.

For example, a single story extension to your home would take around 12 weeks to complete, and you can expect to add another 3-5 weeks to the build time if the extension is to be on two storeys.

Why Reinvest? Trying to sell your property can be tough.  There is a shortage of buyers in the market with many people concerned about job security and a lack of mortgage finance.  First time buyers are struggling to raise the deposit they need to get onto the property ladder and prices are still falling across the country.  So, for many people their only choice is to stay in their home.

The equity in your property need not sit there locked up and untouched. By accessing this equity, you can improve upon your home to increase your standard of living, as well as adding value which is an investment in your future as the property can be sold for a higher amount in the years to come.

Value is added generally by increasing the size of the property, adding rooms, converting unused space and generally improving on the property so that it is bigger, better and more beautiful than it was before. Of course, a well kept and fresh home will attract more buyers in the future.

Extension projects can be cheap, non-disruptive or fast, but are rarely all three, Orme said, adding that it was difficult to save lots of money by doing a job quickly build  because it usually means employing more workmen, at a higher cost. Likewise a build which keeps everything clean and stress free will also be more expensive.

The benefit of a fixed rate mortgage is that the interest rate remains at a fixed level for the entire life of the deal and so monthly repayments remain the consistent. This is a clear incentive for those borrowing to change to a product where they can plan repayments with a degree of predictability in these turbulent economic times.

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