How to Increase Your Property Value for Equity Release
Equity release is fast becoming a standard means of living comfortably through retirement.
While pensioners often still downsize in conjunction with a buy-to-let arrangement, the option of remaining in a cherished home with a Lifetime Mortgage or Home Reversion Plan is very appealing to most. All of these options have huge advantages paired with specific compromises.
The best way of getting the best deal from each, is to get things in order ahead of time. That’s especially important when it concerns your biggest asset – your property. Here are a few things to consider for raising the value of your property as part of your retirement planning.
Add Space to Increase House Value
Adding living space is the number one way of raising the value of your property – and the appeal, if done well. Square footage doesn’t age, either, so this is an excellent way of getting a larger retirement pot as well as for ensuring any equity you leave for inheritance purposes is in a good position to increase in value.
A loft conversion adds an average of 12.5 percent to the selling price. That’s up to £40,000 value added to your house, according to Channel 4 property guru Phil Spencer. The figure is based on a survey of estate agents by mortgage lender GE Money. Not every home, however, can accommodate one. Things to consider are whether you will still have sufficient ceiling height to stand up in after the floor joists are strengthened and raised. Easy access to the loft space is also essential. If these boxes are ticked then the rest should be fairly straight forward.
Another way of increasing the footprint of your property is to add a conservatory or extension. While at the lower end, a conservatory is the cheaper option to install, at the top end, both options typically come in at around £30,000; with extensions yielding a further 4 percent increase in property value over conservatories, choice will get you 7 percent.
If car insurance isn’t incredibly high in your area, consider converting the garage. People tend not to use them for their cars. Many people consider converting their garage into living space at some point and doing it for them is one way of increasing the square footage of a property’s living space. Do have a large front drive, if possible, however. While garages have become someone redundant, off-road parking is still an asset, particularly in busy areas.
Modernising for Equity Release
A fully modernised home is more likely to provide a higher value than a home that requires improvement.The state of the kitchen makes all the difference to what people are prepared to pay for a property. As does damp proofing and rewiring – both of choice can be daunting prospects for a buyer, requiring extensive plaster work and sometimes the replacement of whole floors.
Typically, a new kitchen will increase house value by 4.6 percent, but be sure to keep the cost of the kitchen in proportion to what houses typically sell for in your area. And while installing all the latest equipment may be a fantastically enjoyable thing to do with your lump sum, by the time the house sells that equipment may well be very out of date.
It might be best to not consider this factor at the start of your equity release plan – though updating is possibly worth some thought later on.
The same applies to the bathroom. Future-proof it – to ensure you can live with it if mobility becomes a concern later – but make it easy for future owners to picture where the bath or shower may go, should they need to make that switch themselves.
With over 4 million over 50s currently planning to top up their pensions with equity released from their homes, it’s worth considering in advance how you can get the best value from your home’s equity. Try our Equity Release Calculator now for a starting point, or call 03333 441115, to speak to a Financial Adviser.