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Research reveals which home improvements yield best return on investment
The average home improvement in the UK would add a healthy 10% to the value of a home, based on home owner’s estimates, new research shows. This works out at just under £30,000 whilst the average return on investment was estimated to be 80%, based on the total amount spent by home owners, according a new home improvement index from peer to peer lending firm Zopa. The new research, which asks home owners who have recently taken out a home improvement loan across the UK how much value their renovation added to their property, shows that the top improvement is a conservatory costing an average of £5,300 and giving a 108% return on investment. Next is garden improvements costing an average of £4,550 giving an 88% return followed by exterior work costing an average of £6,000 with a return on investment of 75%. An extension is much more costly, averaging £19,750 but only offering a 71% return on investment while a new roof costs £4,150 with just 63% return and a loft costing an average of £24,600 but comes with a return of just 50%. Kitchen and bathrooms are often the rooms home owners want to change the most but they offer the least in terms of returns. A bathroom renovation costing an average of £4,900 is bottom with a return of just 48%, closely followed by a kitchen costing an average of £9,600 with a return of 49%. Some 82% of home owners said that despite improving their homes, they were not planning on selling soon. The firm says this suggests that the current housing market where price growth is slowing could be putting home owners off moving, and instead adapting their current homes to their situations. ‘With the latest housing market reports showing the market to be slowing down, home owners could add significant value by looking at ways to improve their current homes, rather than move,’ said Zopa chief executive officer Giles Andrews. ‘With record low rates on borrowing, home improvements can be a cost effective way to add value to your property for the long term,’ he added. Continue reading
Research shows sneaky fees and charges make it hard to get best mortgage deal
UK borrowers could be paying over the odds on their mortgages and with sneaky fees and charges making it harder for people to find the best deal, it is claimed. Research from consumer champion Which? reveals that there are more than 40 fees and charges across the market, including set up fees, arrears fees and final repayment fees. Providers using different names for the same or similar fees. For example, a booking fee can also be called a reservation or application fee. There is also duplication with some lenders charging more than one set up fee. The research reveals increases to the cost of some fees. The average arrangement fees have almost doubled in the last five years, from £878 in 2009 to £1,588 in 2014 and there is a wide variation between lenders in the cost of the same fees, suggesting that fees don't always reflect the true cost the lender incurs. Which? also highlights a lack of clarity which makes it difficult for borrowers to tell if the fees are avoidable. The research shows that consumers borrowing £100,000 over two years could save as much as £1,503 if they took into account the set up fees rather than choosing the product with the lowest interest rate. This vast array of confusing fees and charges, which aren't always reflected in the standard APR (Annual Percentage Rate of Charge), means the total cost is not clear to borrowers leaving them unable to easily find the best deal. The research found just 3% of people could correctly rank the cost of five two year fixed rate mortgage deals when displayed using typical information, including APR. This rose to 36% when presenting the total cost of the mortgages over 24 months. With mortgage repayments the biggest monthly expense for most homeowners, and the prospect of future interest rate rises adding to this, Which? is calling on the Chancellor George Osborne to use his Autumn Statement to make it easier for people to find the best mortgage deal, working with the FCA, industry and consumer groups. ‘Home owners could be paying over the odds for their mortgage because of the complex range of fees and charges that prevent them from finding the best deal,’ said Which? executive director, Richard Lloyd. ‘The Chancellor must act now to stop sneaky fees and charges and end mortgage confusion for consumers. The government and the regulator should also explore better ways of presenting the total cost of mortgages,’ he added. Suggestions for change include making mortgage price comparison easier. Which? says given the limitations with APR, the government and the Financial Conduct Authority should explore other ways to present the total cost of a mortgage. It also suggests making the full cost of a mortgages clearer. For example, all compulsory fees payable throughout the deal period should be expressed as a total of fees and included in the advertised costs. It should also be clear which fees payable over the life of the mortgage are compulsory and which are… Continue reading
UK regional office market recovery strong with take up highest for four years
The recovery in the UK’s key regional office markets is proceeding apace with take up in the third quarter of 2014 at its highest in four years and 40% above the five year quarterly average. The latest research report from Knight Frank shows that the majority of the 10 cities covered in its regional report saw take up ahead of their averages, although Aberdeen and Glasgow were the standout performers despite the uncertainty surrounding the recent referendum. Glasgow saw 219,241 square feet of take up underpinned by a flurry of key deals including Network Rail at 151 St Vincent Street and Clydesdale Bank at Granite House while Aberdeen saw a record 647,874 square feet of take up which included two substantial pre-lets. Collectively, 2014 is set to be the most active year for the regional markets since 2008, the report says, adding that for the majority of markets, 2014 take up to date is already above or close to the annual average for each of the previous five years. Aberdeen has already achieved a record year while Manchester is certain to break the one million square feet mark for 2014. Birmingham, while arguably the one underachiever thus far in 2014, saw a substantial 80% rise in demand in the third quarter of the year. Leeds is also expected to end 2014 strongly. ‘Developers are responding cautiously to the growing shortage of Grade A supply which characterises the majority UK’s key regional markets. Collectively, speculative development activity climbed to a six year high of 2.2 million square feet by the end of the third quarter,’ the report says. It also shows that prime headline rents remain under upward pressure. Two markets saw headline rents increase during the third quarter, with Glasgow rising to £29.50 per square foot and Leeds to £26.00 per square foot. Rental growth is expected to take place across the majority of markets over the next 18 months, with new development completions securing higher prime rental levels in Bristol, Birmingham and Manchester. The report describes investment activity in the regional office markets as ‘exceptional’ in the third quarter with £1.3 billion of assets changing hands, the highest seen in a single quarter since the third quarter of 2007. Total volume for 2014 to date now stands at £3.1 billion, already eclipsing the annual total for each of the last six years. ‘The third quarter’s impressive turnover reflects an increase in buying opportunities since summer, as some investors have sought to capitalise on significant price increases over the past 12 months,’ the report explained. ‘While major lot sizes were key to turnover with the largest 10 deals accounting for 75% of turnover, the quarter saw 40% more transactions than the five year quarterly average and this is indicative of the ongoing depth of investment demand,’ it adds. Despite a substantial weight of money continuing to target regional office stock, evidence in the market suggests that pricing was broadly stable in the third quarter. Across the 10 key regional markets,… Continue reading
