New study details ways to add value to your property
The UK housing market has experienced a significant shift in the past few years, with increasing interest rates and a burdening cost of living crisis impacting homeowners and property investors. As a result, many homeowners are seeking ways to add value to their homes and investment properties, however the worst thing they can do is embark on a major project on a whim without thorough research or planning.
We looked at a recent study conducted by estate agents Barrows and Forrester. Their study identified the most valuable renovations to undertake by analysing 15 common renovation projects and calculating how much each could be expected to add to a property’s value once expenses have been considered.
The study showed that a property extension would add the most value, increasing the market price of the average home by 15 per cent or an additional £44,149 based on the current UK average house price of £294,329. However, the average cost of adding an extension was estimated to be £40,000, leaving just £4,149 of added value.
The research found that to maximise return on investment (ROI) in current market conditions, property owners should consider a garage conversion, which costs an estimated £13,750 to construct but adds 10 per cent to the home’s value, that’s equivalent to £29,433 in the current market. After accounting for costs, a garage conversion, therefore, offers an actual value add of £15,683.
The research also found that a garden room/office is a wise investment, as they cost around £9,500 to build but add 7 per cent (£22,075) in value, resulting in a potential ROI of £12,575. This was followed by loft conversions, which produce a £6,649 uplift in value, then a utility room (+£6,616), redecoration throughout (+£5,898) and solar panels (+£5,636).
Despite these promising numbers, it’s important to approach renovation projects with caution and thorough planning. Factors to consider include the property’s location, the current housing market conditions, and the project’s potential return on investment. It’s also important to conduct a thorough cost-benefit analysis to ensure that the investment is worthwhile, especially in the current economic climate.
Landlords switch to cash buys amid high rates
High mortgage rates have led landlords to switch to cash, meaning that 59% of UK buy-to-let purchases are mortgage-free so far this year, the highest share in six years and up from 53% in 2022, data from a Hamptons survey shows.
The survey adds: “Higher interest rates make it harder for the BTL sums to stack up, particularly in low-yielding areas of the country that generate smaller rental returns.
“Furthermore, it’s these low-yielding areas, particularly in the South, where investors may find it difficult to pass a lenders’ stress test and explain why more are turning to cash.”
HSBC buys UK arm of Silicon Valley Bank for £1
HSBC has acquired tech-focussed Silicon Valley Bank UK for £1. The move comes after the US’ then sixteenth-largest bank was shut down by California regulators on Friday 10 March after investors withdrew money en masse.
It was the largest bank failure since 2008 and the second-largest bank failure in US history, with the firm having $209bn in assets – and £151.6bn of this being uninsured.
The bank’s interest on this side of the pond amounts to circa £5.5bn of loans and £6.7bn of deposits spread across over 3,000 business customers.