Renovation and refurbishment projects are a cost-effective way of increasing the value of a property. Whether it be undertaking an extension, replacing old fixtures with modern furnishings, or improving the environmental sustainability of a house – there are plenty of creative options available for homeowners.
The UK has always had somewhat of a love affair with home improvement projects. COVID-19 has only increased the desire for more individuals to take on new refurbishment and renovation projects, be it for their primary residence or a buy-to-let property. A survey by NatWest, for instance, revealed that over three-in-five homeowners (62%) would consider remortgaging to undertake a home improvement project.
As someone who works closely with property investors, buy-to-let landlords and brokers, I believe that the UK is actually on the brink of a renovation and refurbishment revolution that will improve the standard of properties available on the market. At the same time, it will help bring about the country’s post pandemic recovery.
Sparking demand for home improvement projects
You may be thinking to yourself exactly why homeowners are considering improvement projects when we are in the middle of global pandemic with no real end in sight. In reality, the rise in activity and demand for such projects is directly related to the COVID-19 pandemic.
Since 23rd March 2020, the UK has been adhering to social distance measures. When the UK was officially in lockdown, the majority of commercial workspaces and offices were temporarily closed. This meant that a significant proportion of employees were forced to work from home. While this did pose initial challenges, the transition to remote working was also an eye-opening experience for certain businesses.
For the first-time, it became apparent that many workers could perform their job without having to be physically present in the office. Business leaders have also begun questioning whether they should consider downsizing their offices if this type of flexible working is likely to become the norm post-pandemic.
At the moment, it is difficult to tell. Nonetheless, with the introduction of a three-tier lockdown system, it looks as though remote working will remain the norm for the rest of the year. As such, it makes sense for individuals working from home to upgrade and improve their property, so that their home can effectively accommodate their working needs while at the same time still functioning as a living space.
This type of thinking has already resulted in a significant increase in renovation projects during the summer. According to Money.co.uk, UK homeowners have spent over £55 billion since the introduction of lockdown measures. Two-thirds of homeowners (65%) also said that spending more time at home has inspired them to renovate their properties.
A survey released by the Federation of Master Builders also shows that increasing market interest for home improvement projects has resulted in more work for SME firms based in the building industry. Based on their experiences, 42% of SMEs told the Federation of Master Builders they are predicting higher workloads during the Autumn months.
This should be seen as positive news. To promote consumer spending and investment activity, the UK Government has been focusing on the property market. This is due to the sheer size of the sector and its significance a key driver of economic growth and productivity. An increase in home improvements projects will not only increase the value of the existing stock but also provide heightened demand for construction and development firms to take on new projects.
Financing home improvement projects
As a bridging lender, Market Financial Solutions have been working closely with homeowners undertaking renovations or refurbishments, be it to comply with HMO standards or simply extend a property. Based on the conversations our Business Development Managers have been having, what has become clear is that some are finding it challenging to access the finance needed to take on such projects.
Banks have become stricter with their lending criteria at the moment, and this is resulting in applications taking longer to process. This can have significant consequences, particularly when it comes to meeting deadlines and minimising potential construction costs. For this reason, anyone considering a home improvement project in the coming months must first ensure they have the necessary finance in place.
This means looking beyond the limited amount of loan products available on the high street and also considering bespoke loans that can be deployed by specialist finance providers. Unlike mainstream lenders, specialist finance providers can deploy loans quickly that are tailored to meet the individual needs of each applicant. What’s more, loans can be structured taking into account the construction deadlines.
Looking ahead, I anticipate a sustained rise in the number of home improvement projects taking place around the country. This makes sense, particularly for homeowners looking to increase the value of their property through a creative extension or modern refurbishment. The ultimate success of such projects, however, will depend on whether homeowners have the necessary finance in place to fund such ventures, be it from mainstream or alternative lenders.
Paresh Raja, CEO, Market Financial Solutions
Paresh Raja is the CEO of Market Financial Solutions – an independent bridging finance provider that arranges fast and flexible bridging to intermediaries and private clients.