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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
ARLA calls for better regulation of rental fees in the UK
Better regulation is needed in the private rental sector in the UK to stop rogue agents charging over the odds tenant fees, according to the Association of Residential Letting Agents (ARLA). ARLA’s most recent report on tenant fees found that 74% of ARLA licensed agents charge tenants no more than £250 in tenant fees. Overall, among the members surveyed, the report found ARLA licensed agents charge a reasonable £213 on average in tenant fees to cover the lettings process. While many are concerned about tenant fees, David Cox, managing director of ARLA, said they are needed. ‘Tenant fees cover the cost of essential items during the lettings agreement process such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal,’ he explained. ‘All of these items cost the agent money to carry out, and in fact, provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items,’ he added. However, there are some landlords and agents that do take advantage of the cost of tenant fees. ‘This is where better regulation is needed in the private rental sector to ensure consumers are not taken advantage of,’ said Cox. ‘We want to see tenants paying a fair price for the service they receive. Regulated agents don’t charge excessive fees. The results of our survey show that on average ARLA licensed agents charge a reasonable £213 in tenant fees; which we see as a fair price,’ he added. Among ARLA licensed members, the services which tenants are most likely to be charged for are reference checks, with 98% of branches doing so. Some 69% charge for the tenancy agreement and 65% for tenancy renewal. Also 57% of ARLA licensed agents stated they charged a flat fee that includes all of these services for tenants, rather than charge individually itemised and calculated tenant fees. ‘Renting a property is a big financial commitment and tenants should be made aware of what exactly they are being charged for and what they are getting for their money. ARLA supports openness and transparency when it comes to fees,’ Cox pointed out. ‘By choosing an ARLA Licensed agent, tenants are reassured that members follow a strict code of conduct which puts the tenant first. This not only ensures a fair fee structure, client money protection which means their deposit will be reimbursed if their agent goes bust, but also that they will be dealt with in a professional way by a qualified agent to receive the best advice when renting a property,’ he added. Continue reading
Survey reveals many non-home owners in UK think they will never be able to buy
Almost half of non-home owners aged 25 to 34 in the UK don’t think that they will ever be able to buy a property, new research has found, while one in three have no interest in buying. Just 28% of non-home owners questioned for mortgage and home loans broker Ocean Finance say they would like to be able to buy a property one day, and expect to be able to do so. Conversely, 40% of those questioned say that while they would like to be able to buy a home in the future, they do not expect they will ever be able to do so while 32% claimed they are happy to continue renting and have no interest in buying. These findings may suggest that people’s attitude to owning could be changing, whether through opinion or circumstance. And there are numerous reasons why this may be the case, the firm says. These include rising house prices, especially in London and the South East, which mean that even saving for the deposit for a property seems out of reach for many. For example, a 25% deposit on the average house price is now £68,000, more than double the UK average income. Changes to the mortgage market mean it has become harder to access mortgages, with fewer higher loan to value products available and tighter affordability rules. It also says that real income is being squeezed with prices rising faster than income for the past few years meaning that people have had less money to commit both to saving and to thinking about paying a mortgage. In fact, the survey shows that nearly half, 46%, of non-home owners in the key first time buyer bracket of 25 to 34 years old did not think that they would ever be able to afford to buy a house. Perhaps surprisingly, adults aged under 25 remain quite optimistic about their future prospects with 54% of them both wanting to buy a house in the future and believing that they will be able to do so. For people who haven’t got on the housing ladder by the age of 55 the dream of home ownership has faded. Just 4% of non-home owners aged over 55 still expect to be able to buy. ‘Home ownership is already at a 25 year low and our survey suggests that this figure is likely to continue to fall. While four in 10 people still say they’d like to own a property one day, they already seem resigned to not being able to do so,’ said Ian Williams, spokesman for Ocean. Continue reading
