Tag Archives: guides
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
Latest data shows UK help to buy schemes attracting strong support
New figures show the UK government’s flagship Help to Buy scheme is helping more people onto the property ladder and getting more homes built. The Help to Buy schemes have created over 54,000 home owners in England with over 39,000 households buying new built properties through the equity loan and NewBuy options, and 15,000 households buying through the mortgage guarantee. A further 3,400 new homeowners have been created in Scotland, Wales and Northern Ireland through the Help to Buy mortgage guarantee scheme, Housing Minister Brandon Lewis has announced. A breakdown of the figures show that around eight out of 10 sales went to first time buyers and as a direct result thousands of new home owners were created and private house building starts rose by a third. House building has climbed to the highest level since 2007, construction output has seen the sharpest expansion for eight months, and companies are now taking on workers at the fastest rate since 1997. ‘The figures clearly demonstrate the continuing success of the Help to Buy in supporting creditworthy, hardworking people who want to buy a home of their own. Over 54,000 new homeowners have now used the schemes as a valuable alternative to the Bank of Mum and Dad, enabling them to buy with a fraction of the deposit they would normally require,’ said Lewis. ‘But it’s also got Britain building and since the scheme’s launch private house building starts has increased by a third,’ he added. Sales of new build homes have been strong across the country. The highest number of equity loan sales were in Wiltshire with 603 sales, Leeds with 559 sales, and Central Bedfordshire with 499 sales and 20 local authorities have all achieved over 300 sales. The average price of a home is below the national average at £210,000 under the equity loan and £153,000 under the mortgage guarantee. Continue reading
