Is renovating, refurbishing or extending my home in 2015 a sound financial decision? It’s a dilemma many have pondered since the crash in 2008.
Most of us renovate, remodel or extend our homes to improve our quality of life. In the past, when house price rises were galloping ahead of inflation in most areas, investing in our homes was almost always a wise choice. The recession however has led, quite rightly, to our feeling the need for caution and to minimise the financial risk associated with these decisions.
Here we outline five good reasons why now really is a good time to get your building project rolling.
1. House prices are predicted to rise in 2015
The key areas CLPM work in – London and the South East- saw real growth in house prices in 2014. While we may not see anything of that magnitude in 2015, even the most conservative forecasters are expecting house prices increases across the board will be in the order of 4%. Considering the low rates we can expect from savings in the bank, and the low cost of borrowing that’s good news.
However, there are significant regional differences and some downward pressures from uncertainty over the UK general election and low wage increases so you need to make sure you understand your local property market.
Nevertheless, adding floor-space and additional rooms to your home can certainly add value. Our quantity surveying team can help you work out how much your renovation, remodel or extension work will cost. Spending a little on getting professional estimating advice can make sure you’re clear on the likely costs of your building works before you start any tender negotiations.
2. Mortgage rates are expected to remain low until mid 2015 at least
Lending to extend or renovate can be an attractive alternative to moving. Most banks or lenders view the appointment of a project manager very positively. Project managers help make sure the building work is both completed to a high standard and runs smoothly. Not only have that, for large scale works, such as full house renovations or extensions with remodelling works, insurance companies value project managers involvement to minimise the risks.
3. Architectural practices are reporting increased demand
The architects we work with across London and South East are reporting a healthy increase in their workload. Architects value project managers as they can help to realise their designs and be their eyes and ears onsite. A healthy order book for architects reflects the healthy state of the housing market. This is particularly relevant for clients with larger properties in the more prestigious areas or those who are living in properties which are ripe for modernisation.
4. Modern technology investment will keep your home more comfortable and cut running costs
Whilst energy prices are reducing as a result of the collapse of the price of crude oil, they are still very high in the UK. Looking at boosting insulation or updating old inefficient heating systems still makes financial sense. Technological advances will allow variable thermostatic controls as well as cheaper renewables. There are many worthwhile government incentives such as the RHI too. Our CLPM sustainability experts can help you to improve the energy efficiency of your home, cut your running costs and look at the best options for renewables when planning your renovation, extension, or new build.
5. Building costs are predicted to increase in the future
Across the industry, building supply merchants are applying increases in building materials which they say is passed on from manufacturers. In the past few years, manufacturers have had to keep wage increases low to survive and with a skills shortage and demand increasing, 2015 will likely see an increase in the cost of materials in the order of 10%. But it doesn’t have to be bad news – it just means that budgeting and buying effectively is now more important than ever. CLPM quantity surveyors can ensure that your project is budgeted for accurately. On large projects, it’s even more wise to make sure you don’t embark on the tender process without a quantity surveyor’s input to help you control your costs.
So, when asked if 2015 is the year to build, we say yes. But make sure you approach it in a systematic way, using the best team of experts to support you along the way.
Thinking of renovating, remodelling or extending your home? Call us for a chat on 01923 896550.