AA Personal Loans Finds 1 In 4 Are Improving Instead Of Moving
30 April 2009 / by Rachael Stiles
One quarter of homeowners intend to increase the size of their homes before the end of the recession, research from AA Personal Loans has revealed, which has seen no fall in the number of loans taken out for home improvement because of the economic climate.
AA Personal Loans has speculated that this illustrates a shift towards people settling down and improving their homes to suit their changing needs and wait out the recession, instead of moving house.
With the average house losing around 10 per cent of its value since the property market took a turn for the worst, homeowners seem to be putting their needs and home comforts above the resale value.
More and more homeowners are treating their properties as long term residences, rather than merely an investment, before they move onto the next one, the personal loan provider believes.
Rather than building extra bedrooms or conservatories, which are common additions for increasing the property’s value, a quarter of home improvers adding rooms are choosing to build a new area for entertaining in.
One in six is opting to extend their house so that they can add an office to their property; both are rooms which suggest long-term plans for remaining in the property, AA Personal Loans suggests.
It deduces that these rooms hint towards a more domestic purpose over economic motivations, and are also reflective of the current economic climate, as more people look to entertaining at home to save money, or are spending more time working at home.
The survey also found that almost five million homeowners have decided not to sell their homes during the recession, with a further six million saying they will definitely be renovating them within the next 12 months.
Giving their reasons for this decision, 57 per cent said that they wanted to create a better living environment, compared to half this number, less than a third of renovating homeowners, who said they were doing so in order to add value to the property.
“Although many would expect demand for home improvement loans to be less during the recession, our figures show that their popularity is actually unchanged,” said Mark Huggins, head of AA Personal Loans. “As long as the recession keeps impacting property values, we’re not expecting that to change as homeowners continue to make improvements, albeit for their own needs, not necessarily the needs of a future owner.
“Building an extension may involve a significant outlay to start with however, in the short term owners will be making their property more comfortable for themselves and in the long term they are adding value,” he added, “in this way, such renovations effectively kill two birds with one stone.”
Mark Burgess, editor of Estate Agency Times, commented: “Even though the nation is collectively tightening its belt as the recession rolls on, it’s not that surprising that many homeowners are bucking the trend by taking out home improvement loans to renovate their properties.”
Mr Burgess added that providing homeowners keep up with their loan repayments, now is actually the best time to make home improvements, because labour costs are more competitive and extending a property will add value to it whilst house prices are falling.
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