What to look for in a renovation project
Scott Austin • May 16, 2021
How to spot a home that you can add value too
This story + many more are available in our 1st edition of the Zoom Mortgage and Property Magazine. Available for you for free here https://zoommortgage.lpages.co/zoom-mortgage-property-magazine
WHEN HUNTING for property, many buyers are looking not just for a home they’d like to live in, but also for an investment opportunity. If you’re planning on buying a home to renovate, there are plenty of things you’ll need to consider. While this is often a reliable way to turn a more profitable return on your investment, buying a ‘fixer-upper’ is not for everyone, and there may
be elements to such a large commitment that you haven’t already considered. Spotting a property with better-than-average investment potential can be difficult, especially if you’re a first-time buyer at the start of your search. So, we’ve created a checklist of features to look out for and categorised them based on how much value they might add if you use them to your advantage.
POTENTIAL TO ADD SPACE
For most properties, the biggest opportunity to add value is to increase the square footage.
You can do this by extending the property (or adding to an existing extension), adding a conservatory or building a second property on the same site. The key feature you’re
looking for is unused outdoor space that you can build into. Look out for: • ‘Side returns’ on terraced properties, i.e. a narrow strip of garden between the house and its neighbour.
• Secondary structures, such as outhouses, that can be connected to the main property
• Land on which you could build a summer house or garden room.
• An existing extension or garage on which you could add another storey
• Adjacent plots of land available for purchase
Changes like these will usually require planning permission. For an indication of how likely
this is to be granted, take a look at nearby properties to see if any similar work has been completed.
POTENTIAL TO RECONFIGURE SPACE
The second biggest opportunity to add value is by creating more usable space in a property without adding to the square footage. This can be done by converting a previously unused area, or by changing the floor plan. Any additional living space is a plus but creating an extra bedroom will add the most value.
Look out for:
• Unconverted garages, attics and basements with the potential to become a bedroom or reception room
• Small kitchens next to larger dining rooms or living rooms, which can be combined to create an open plan living area
• Single bedrooms next to much larger ones, which can potentially be equalised by moving an internal wall. Walls can only be easily moved if they’re not load-bearing, and not all garages, attics and basements are suitable for conversion. So, you may want to check with a surveyor that you’ll
be able to carry out the work you have in mind.
POTENTIAL FOR FUNCTIONAL IMPROVEMENTS
If you’re looking at older properties, there can be substantial opportunities to add value by bringing them up to modern standards or adding newer features that will perform better.
Look out for:
• Outdated kitchens and bathrooms, to which you can add higher-quality appliances, improved storage and attractive surfaces
• Poor Energy Performance Certificate ratings, which can be improved in various ways from upgrading the heating system to adding solar panels
• Traffic noise from nearby roads, which can sometimes be dramatically reduced with double glazing and sound insulation
This type of work can be quite expensive to undertake relative to the added value it offers, but you’ll also benefit from the upgrades while you live in the property.
POTENTIAL FOR VISUAL IMPROVEMENTS
Improving the aesthetic appeal of a property can add some value. Crucially, you’ll need to snag a
bargain by looking past features that other buyers find off-putting, with the intention of changing them once you move in.
Look out for:
• Original features, such as floorboards, wooden beams or fireplaces, that are in poor condition but can be restored
• Unusual or dated decor that can be removed or replaced
• Unattractive exteriors, which can be disguised with cladding or climbing plants
The more work there is to do, the more potential there is to add value. But it’s easy to take on too much and be left with a project that needs more time or money than you can give it. Be careful to match the amount of work required with your level of ambition.
>> UNDERSTAND ALL OF YOUR OPTIONS, NO MATTER HOW COMPLEX <<
Whether you’re looking to buy your first home or investing in property, we can help.
Mortgage lenders have tightened their belts and changed their lending rules and practices in recent months and the last year underwriting has changed considerably.
In addition, mortgage rates and deals constantly come and go as lenders look to attract new clients.
To discuss your options telephone 08003101210– email Contactus@zoommortgage.co.uk.
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So, here we are half way through 2021 and the property market is still going crazy, I heard a story the other day about a first time buyer that went to view a flat in London and there were 10 other couples waiting outside, now that might not seem like much but it might just put you off selling up and moving. So, if you are going to "stay put" then it is time to think about if you can get a better rate for your current mortgage. With rates at all time lows and not much indication that they are going up anytime soon, this is your opportunity to save money. So if you are on a fixed rate that is going to end in the next 6 months then now is the time to get in touch and see if a better rate is available to you. If you are on the standard variable rate or a tracker and you want to see if a fixed rate is now worth it because the rates are so low then we can help to. We can even help you stick with the same lender and get you a better rate than the standard variable, so if you need quick action we can help there too. Contact Zoom Mortgage telephone 0800310121 email contactus@zoommortgage.co.uk .
This story + many more are available in our 1st edition of the Zoom Mortgage and Property Magazine. Available for you for free here https://zoommortgage.lpages.co/zoom-mortgage-property-magazine THE CORONAVIRUS (COVID-19) pandemic led to the virtual disappearance of mortgages that only required a 5% deposit. But the Chancellor, Rishi Sunak, announced on 3 March a new initiative during his Budget 2021 speech. The government-backed mortgage guarantee scheme is open to first-time buyers and home movers across the UK and is aimed at encouraging banks and building societies to offer 95% loan-to-value (LTV) mortgages again. The announcement is tremendous news for first-time buyers looking to get on the property ladder at a time when, for many, owning a home may seem an impossible dream as they would otherwise not be able to find a large deposit to secure a mortgage deal. GETTING ON THE HOUSING LADDER The announcement aims to stimulate the housing market and get more people onto the housing ladder. The Chancellor said there was good evidence that ‘this will help those that are getting on the housing ladder disproportionately to other home movers.’ He said: ‘We know from the previous time we did it, it helped 100,000 people buy a home and the average value of a home bought under the scheme was £160,000, compared to the average price of a home which at that time was more like £225,000. ‘And 80% were first-time buyers, so it feels like it is a policy that is quite well targeted to help people get on the housing ladder.’ ACROSS THE UK The government introduced the scheme for new mortgage applications which commenced from April and provides a guarantee to lenders across the UK that offer mortgages to people with a deposit of five per cent on homes with a value of up to £600,000. This scheme is for any ‘creditworthy’ household struggling to save for a higher deposit. These will be standard residential mortgages – so no second homes or buy-to- lets. If the borrower gets into financial difficulty and their property is repossessed, the government will cover that element of the lender’s losses. The scheme opened for new mortgage applications from April and will be open to new applications until December 2022. Several of the country’s largest lenders, including Lloyds, NatWest, Santander, Barclays and HSBC, are offering these 95% mortgages, with others to follow shortly after. The mortgages must be on a repayment basis, not interest-only. And borrowers will need to be credit checked and meet the standard rules on affordability. All lenders under the scheme will also offer mortgages fixed for at least five years, providing options for buyers with smaller deposits who want the security and predictability of a mortgage with a fixed rate over a longer term. Eligible mortgages guaranteed under the scheme will need to: • be a residential mortgage (not second homes) and not buy-to-let • be taken out by an individual or individuals rather than an incorporated company • be on a property in the UK with purchase value of £600,000 or less • have a loan-to-value (LTV) of between 91% and 95% of the value of the property • be originated between the dates specified by the scheme • be a repayment mortgage and not interest-only • meet standard requirements in terms of the assessment of the borrower’s ability to pay the mortgage, for example, a loan-to- income and credit score test LIFELINE FOR FIRST-TIME BUYERS Thanks to soaring house prices and tighter rules on mortgage approvals, the first rung of that famous property ladder can be very hard to reach. So the new government backed mortgage guarantee scheme will be a lifeline for those first-time buyers trying to get on the housing ladder. >> GET AN ESTIMATE ON HOW MUCH YOU COULD BORROW << Are you ready to buy a property? You’ve dreamed of owning a home for as long as you can remember, or maybe you’re looking to move to another property. Now the new government-backed mortgage guarantee scheme could make it a reality. To discuss your options and get an estimate on how much you can borrow, contact Zoom Mortgage – telephone 0800310121 – email contactus@ zoommortgage.co.uk
