Home values – ways homeowners are increasing their property values

New research by mortgage broker, Henry Dannell, reveals that equity release can help homeowners add serious value to their property. 

By analysing the cost associated with key home renovations, what level of equity release would be required to cover this cost, and the value added as a result, the mortgage broker was able to accumulate these findings.

The figures show that homeowners aged 55 and over releasing equity from their home is up 5% in the last year and these account for 36% of customers.

An increasing number of homeowners are releasing equity from their homes for home and garden improvements.  

Home conversions and additions that add value

An increase of around 15% could be added to any property with a loft conversion. Based on the current average UK house price of £281,161, loft conversions could add £42,174 to a home. 

Although loft conversions can add much value to any home, these do not come at a low cost. These require an equity release of around 12.3% and cost around £34,5000.

An additional bedroom can add over £6,000 in value to a home and will require a 9.8% equity release.

The average cost of carrying out a garage conversion comes in at £14,500. Only 5.2% in equity release can grant a homeowner with a garage conversion and the 10% added in value equates to £28,116.

With just 2.3% in equity release, a utility room can add £7,558 to a home. Other changes around the home that are worthwhile include a kitchen revamp, a conservatory, a summer house, landscaping the garden, and a new bathroom.

Director of Henry Dannell, Geoff Garrett, explains: “Home improvements are one of the most common reasons that homeowners will opt to release equity from their homes. In doing so, it enables them to improve and expand on their existing property to prevent the need to move and to accommodate their growing immediate family.”

“Funding these improvements by releasing equity also allows them to carry out the required work without the need to save, or dip into their pension pot. Of course, the additional upside is that these improvements are likely to add value to their home, even after the cost of the work is covered.”

“So not only is equity release a financially sensible approach, it can also be a smart investment for the future.”