Improve Not Move
While new homeowners will typically redecorate or refurbish a new home or an older one to suit their tastes, the current trend within the housing market can best be described as ‘improve not move.’ A number of surveys undertaking by housing industry organisations including insurance providers carried out before the pandemic, found that most respondents were planning to stay put for the foreseeable future, citing reasons, such as rising house prices and the uncertainties caused by Brexit as major reasons for not looking for a house move in the short-term. The outlook for future employment prospects and household income are likely to have accentuated these trends in the current circumstances, while the eventual outcome remains as elusive to predict as ever, with constant changes in advice and restrictions.
Enthusiasm for moving to a new house in the short-term may also be dampened by current difficulties in obtaining mortgages, even though the recent interest rate reduction by the Bank of England (BoE) at 0.1% is at its lowest level yet and could be cut further into negative territory.
Expansion projects, such as extensions and loft conversions, also account for a sizeable percentage of home improvement works at present. These can add significant value to a property – for example, adding an extra bedroom via a single or 2 storey extension adds an estimated £14,500 to a property’s value on average. This compares to industry estimates of around £11,000 to £13,000 for an average size loft conversion. Demand for expansion projects, such as these, is also being driven by the growth in the number of younger people moving back in with their parents for financial reasons, with more room required to house the various generations.
However, although the current situation has affected the level of planning applications for domestic properties in Great Britain, the total has been falling slowly since 2017, with the highest number of applications being in London and the South East. Extensions account for around 40% of planning applications during this time and this figure has also been declining slowly, as householders’ confidence has been eroded by a slowing economy and Brexit uncertainty.
*The information for this blog post was taken from the Domestic Bedroom Furniture Market Report