Adding value through improvements.
According to a new market analysis from Savills, would-be buyers will need to reconsider their strategies for making significant money out of the market in future as we move into an era of much slower growth in average prices, where values track household incomes.
Said the report: "The simplest way of achieving this will be by examining the potential to add value through home improvements. The key to adding value comes in expanding actual space rather than mere cosmetic makeovers."
However, the report says that although half of Britain's housing stock was built before 1944, homeowners' past record of sinking money into homes is not good. Less than a fifth of the equity withdrawn from housing goes on major home improvements, and much of the money spent on property goes on updating the internal fabric - kitchens, bathrooms and general decorations.
Savills says a recent survey indicated that DIY spending averages pounds 6,400 per household per year. That's probably an over-estimate - but it means some people spend pounds 300,000 over a 50-year period of ownership and that sum, says the report, is a "huge hidden support for house prices".
The agency also claims continuing polarisation of the market means that prime period housing and new-build sectors will prove the best investment from now on. Says the survey: "Our aspirations to live in the best housing will support the scramble to get onto the most desirable rungs of the ladder and provide a steady upward push on values in these two market segments."
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|Publication:||The Journal (Newcastle, England)|
|Date:||Nov 15, 2003|
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