More homeowners choosing to improve rather than move

26 Feb, 2019

26 Feb 2019 An increasing number of people are choosing to borrow more money through their mortgage to improve their home rather than move home, according to new data released by Yorkshire Building Society.

Figures from the Yorkshire show there was a 12% increase in the number of homeowners choosing additional borrowing last year compared to 2017, and recent data from UK Finance reveals the number of home-movers has reduced 48% since 2006. This suggests that some homeowners are looking to use some of the value in their home to make their current property work better for them as an alternative to moving.

Borrowers in a position to refinance their property could consider raising money by remortgaging. Yorkshire Building Society recently increased its maximum remortgage loan amount to 95% of a property’s value, to give borrowers more choice when financing improvements.

Janice Barber, mortgage manager at Yorkshire Building Society, said: “It’s perhaps not surprising that we’re seeing homeowners borrow more on their mortgage or remortgage to raise funds for home improvements as people look to improve their home rather than move while Brexit is still uncertain and the housing market cools.

“Whether it’s building an extension to accommodate a growing family or a desire to renovate the kitchen, homeowners may naturally turn to personal loans or credit cards to finance home renovations. But our data shows an increasing number of borrowers could also be looking to the value in their property.

“Anyone considering a significant spend on home improvements that requires additional funds may want to discuss remortgaging or additional loans with a mortgage advisor. 

“That way they’ll have all the necessary details and facts to make an informed decision about the best way to fund their new project.”

The Yorkshire’s 95% remortgage options include a two-year fixed rate of 3.34%, which has no upfront fee, free standard valuation and free legal fees.

How can borrowers best unlock their home’s potential?

1.    Look up, down and out – there may be space for a loft or basement conversion, or perhaps a side extension? Look at underused space around your home to see if there are any areas that can be turned into a better use of space. Don’t forget though, if you plan to make significant home improvements you might need to seek approval from your mortgage lender.

2.    Garage full of junk? – have a clear out, sort and sell or donate your goods to make way for an alternative space. You might even make some money in the process to help contribute to the cost of the improvements.

3.    Don’t just get one quote – if you decide to go ahead with any improvements get a number of local builders round to give you a free, no obligation quote.

4.    Be creative, but original – you might not want to move now, but bear in mind that original house features can help with future selling potential. Creating a fresh, new space while keeping original doors, windows and fireplaces could maintain your property’s charm and personality.

5.    Sense check your plans – speak to your local estate agent about what you’re planning to do to make sure it has the potential to add, not lose, value in your home. That is unless you value making the space work for you and your family now, and aren’t worried about getting your money back at a later date.