Home improvements in the era of low house price growth

Gone are the days when rising house prices were a guarantee, covering the costs of lavish extensions and upgrades. With monthly housing costs skyrocketing and building materials inflation on the rise, it is imperative to tread carefully. One needs to have an eye on cost-effective alternatives in 2023. Opting for sustainable materials and energy-efficient solutions not only benefits the environment but also presents long-term savings. Smart renovations that align with market trends and consumer demands will give you a competitive edge when it comes to selling your property.

Homeowners must think twice about the potential return on investment for any proposed improvements and approach any renovation with prudence and a focus on extracting maximum value for money. With escalating housing costs and unpredictable market conditions, it is crucial to make informed decisions and ensure that every improvement endeavour is conducted strategically.

The importance of excellent value for money in home improvements varies depending on the client's outlook and plans. Factors such as their long-term or short-term living intentions, whether they plan to sell or stay put, and their satisfaction with their current repayment situation are crucial considerations specific to their circumstances.

Ultimately, property is for living in. So if you can afford the extra borrowing, and the home improvement will add to your quality of life, why not? If you're looking purely to 'add value', you need to carefully weigh up whether it actually will. Particularly in a falling market.

The first thing you need to ask yourself is; are you buying an investment, or buying a home? If it's the first then the cost vs reward is a numbers game, pure and simple. However, if it's your home then you should be thinking about if and how the changes you want to make help your enjoyment of your home and your quality of life; both of which are arguably more important than whether you get a 1% or a 10% return on the costs.

Home improvements have traditionally been seen as a way to increase the value of a property and potentially offset the costs through future house price growth. However, the current economic landscape suggests that people should approach home improvements with more caution.

Building materials inflation has been a significant challenge in recent years. The Covid-19 pandemic and ongoing labour shortages have disrupted the construction industry causing supply prices to rise. The shortage of available tradespeople and slow recovery of the supply chain have contributed to increased costs.

While house prices in many countries, such as the United Kingdom, have experienced significant increases in recent decades, there is no certainty that this trend will continue.

It is advisable for home owners to think twice about their home improvement projects and ensure they are getting excellent value for money before proceeding.

Its a bit of a catch 22. If they spend the money to improve their home and want to move after it's done, they may not get the extra they spent on it. If they don't improve it, it may be detrimental to their sale... If they plan to stay there for life, what does it matter even what the value is? I think if it changes the aesthetic for the better, you are likely to sell for the best price it can get, that doesn't mean its what you want, but its what you can achieve. Want more? You may need to wait for the prices to rise again.