Stamp duty and soaring house prices are forcing Brits to improve their current property rather than move up the housing ladder, new research shows.
According to comparethemarket.com, six out of 10 homeowners are putting off a move up the housing ladder to remain in their current property and undertake improvements, indicating a possible slowdown in the housing market.
The survey of over 2,500 UK homeowners found that soaring house prices were a key factor in their decision to remain, with 31% citing this as a reason.
The high cost of stamp duty is also a factor preventing homeowners from moving, with one in 10 viewing it as too high and nearly a third (31%) admitting they would be more likely to move house if there was a significant cut.
With the average cost of stamp duty standing at over £3,500 across the UK – not to mention other moving costs such as legal fees, estate agent fees and removals – many homeowners are opting to use that money to add a new kitchen, bedroom or living room to their existing home which could further increase the value of the property when they do decide to sell.
Making significant home improvements is now increasingly viewed as a vital part of adding value and rising up the housing ladder rather than improving quality of life.
Investing in an extra bedroom can add nearly £19,000 to the value of a property, while a loft conversion could add over £15,000, comparethemarket.com.
Those who have built up enough savings could therefore consider investing in home improvements instead of spending the money on stamp duty costs. Even small changes such as adding wooden flooring can enhance the value of your existing property over and above the average cost of stamp duty (£3,500) if you were to move.
Gemma Sonfield, head of home insurance at comparethemarket.com, said: “The huge growth in house prices since 2009, which has seen the average price go from just over £150,000 in June 2009 to nearly £214,000 in June 2016, makes it difficult for many people to make the move they’d ideally want and, for a lot of would-be movers, stamp duty is the straw that breaks the camel’s back.
“With nearly four in 10 homeowners saying that they would undertake home improvements specifically to increase the value of their home, ‘improve before you move’ is becoming an important tactic for climbing the housing ladder versus simply making a person’s living quarters a bit nicer.”
| Value added to property by home improvements | ||
| Home Improvement | Typical average value added | |
| Extra bedroom | 8.80% | £18,826 |
| Loft conversion | 7.10% | £15,189 |
| Extra bathroom | 6.10% | £13,050 |
| New kitchen | 5.80% | £12,408 |
| Central heating | 5.40% | £11,552 |
| Off street parking | 5.20% | £11,124 |
| New bathroom | 5.10% | £10,910 |
| Conservatory | 5.00% | £10,696 |
| Double glazing | 4.20% | £8,985 |
| Landscaped garden | 3.60% | £7,701 |
| Wooden flooring | 2.00% | £4,279 |
