House sales slowdown boosts home improvements

Tuesday, August 19th, 2008

Homeowners around the country are taking their properties off the market and making improvements to them instead, according to a survey by Lloyds TSB.

New kitchens and bathrooms are the changes most likely to increase the value of a house, the survey discovered, with extensions less successful and the least improvement coming from loft conversions and a simple redecoration.

Property TV presenter Phil Spencer said: “The current cooling of the property market is making homeowners think twice about selling up and many are opting to improve instead.”

Lloyds TSB released the figures as part of its push to sell personal loans, but the news still gives useful information showing how householders are reacting to the growing lack of confidence in the economy.

Its survey of more than 500 estate agents found that more than half had experience of customers changing their mind about selling their homes and choosing to improve them instead.

Of the 1000+ householders it spoke to, almost 60 per cent said they’d cancelled plans to sell – and half of those plan to do their home up instead.

Many of those are having to do work that will make it easier to stay in a house that no longer meets their needs, but rather more are hoping to increase the value for a future sale.

Lloyds TSB’s director of personal loans, David Wishart, said the bank had seen a recent increase in home improvement personal loan requests.

He said: “For the last decade homeowners have been able to sit back and rely on rising property prices to increase the equity in their home but sadly this is no longer possible.

“If you want to trade up and avoid substantially increasing your mortgage, you’ll need to add value to the house you’re currently in.”

The survey comes in the wake of a similar one by home insurers Liverpool Victoria (LV), which found that more than £4bn is being spent on home improvements during the current 18-month period by people who have changed their minds about selling.

Average spend is likely to be about £5000 – but almost half the householders surveyed plan to save money by either doing the work themselves or bringing in family members.

LV spokesperson Emma Holyer said: “Despite the challenging housing market and lack of affordable mortgages, we are still a nation obsessed with our homes and what money we can make on them.

“Many homeowners told us they were spending this money so they could profit more on their homes when they do come to sell them after the market has stabilised. This shows that although people are concerned about the short term housing market there does appear to be optimism in the long term.”

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