Millions fancy ‘changing rooms’

With house prices soaring, many people are opting to stay put and turn to property development instead to increase the value of their home.

Research from moneysupermarket.com shows 45 per cent of people believe home improvements are undertaken to increase the value of a home. Another 35 per cent believe property development activities are just done to make a home nicer or better, and if it adds value, that's a bonus.

The research indicates 42 per cent of homeowners (or 7.8 million people) have done some home improvements and are keen to do more in the future. Among that are 1.7 million (nine per cent) who have improved other homes and are planning to do more in their spare time.

Louise Cuming, head of mortgages at price comparison website moneysupermarket.com, said: “It's no surprise we have a bevy of budding property developers out there. With house prices having escalated dramatically over the past five years, along with the cost of stamp duty and mortgage fees, many people are turning to home improvement instead.”

Nearly two-thirds of 25 to 34-year-old homeowners want to or are planning to do more improvements, compared to the British average of 47 per cent. The keenest property developers by region are in the South West with 59 per cent wanting to do home improvements. Less keen are those in the north of Scotland where only 38 per cent have the taste for this activity.

There is also the issue of financing improvements. In two in five cases, a form of credit, such as a loan, credit card or remortgage, has been used to fund the work. The 35 to 44-year-old age group are most likely to remortgage, while the most favoured funding option of 18 to 24-year-olds is to borrow from friends or family (almost ten times higher than the British average).

The research also revealed one in five homeowners have found improvements too stressful or too expensive. This increases to a quarter of 45 to 54-year-olds.

Cuming said: “It seems a large number of people are getting into debt to develop. No doubt, the thinking behind this is there will be a return on investment. Still, it is a worrying statistic that so many people are using a form of credit to finance work, especially with interest rates having risen one per cent since August.

“People taking out credit should compare the market to make sure they are getting the best deal. It may make sense to make small purchases on a credit card (especially if you have a 0 per cent offer), but when it comes to larger renovations, people need to consider their monthly budget when deciding whether to take out a loan or to remortgage.”