Some borrowers are saying that they are finding it difficult to move home. Perhaps it’s because you are worried about stagnant house prices, maybe the cost of upsizing is just too expensive in these difficult economic times or it could be simply because you can’t find the right property or don’t want the hassle. Either way, I can understand these concerns and there are borrowers out there who want to upsize but do not feel it is possible.
One possible solution is to consider improving your home rather than moving. In some circumstances this is actually more cost-effective than moving as building extra space could cost a lot less than trading up. For example, upsizing from a three-bedroom house to a four-bedroom house would cost an extra £40,000 on average (more if you include legal fees and relocation costs), whereas the price of converting a loft can cost around £30,000 or £35,000.
It seems as though many of us are already doing something similar as nearly one in five of our further advances are to fund structural work such as extensions, many of which improve the value of homes.
For instance, recent research by Nationwide shows that creating an extra bathroom adds 6% to the value of the average home, while adding a double bedroom pushes up the value by 12%. Building an extension or loft conversation to create a double bedroom and en-suite bathroom adds even more at 23%. So an extension will not only give you more space, it can also potentially improve the value of your home too.
So if you need extra space but feel that moving home is a step too far, there are other options, with a number of lenders allowing people to borrow more on the mortgage to fund home improvements. We certainly do and we have recently revamped our further advance range to enable our customers to obtain further borrowing up to 85% loan to value at rates that are typically lower than other forms of borrowing.
Of course there are a lot of factors at play which ultimately determine how successful home improvements will be, such as the quality of work that is carried out and what type of property it is in the first place. But extending could be an option that really adds value.
