Are homeowners moving rather than improving

Are homeowners moving rather than improving


Leading experts within the sector seem at odds as to whether or not homeowners are investing in home improvements or not.

Two samples of research on the subject, one by the Royal Institution of Chartered Surveyors (RICS) and another by Lloyds TSB have presented entirely different findings.

As we reported last week, Lloyds TSB’s research has indicated that home improvement spending fell to its lowest level in 12 years during 2010. This is in contrast to the investigation conducted by RICS, which suggests that the depressed housing market has led to an increase in home improvements over house purchasing.

RICS’ research indicates that 48 per cent of chartered surveyors believe that the slow sales market is encouraging people to improve their homes rather than move. London buyers are facing high property prices, prompting them to stay put and carry out home improvements.

David Dalby, Professional Groups Director, RICS, said: “Most properties provide some potential for expansion and improvement, but we would advise people to think about how much they are investing and their key motivator before undertaking major projects.

“It is important to think about the style and age of the property before undertaking any works - remember, what appeals to some people may not appeal to others. Costly disappointments can be avoided by prior planning and research. RICS advise that whatever you decide to do with your home you should seek professional advice and ensure all works are carried out by qualified contractors.”

Regentsmead’s, CEO James Bloom, added: “Clearly in an age when there is a distinct lack of liquidity and in particular mortgage finance, homeowners are taking advantage of improving and staying in their own homes as an alternative to moving. It is far easier to get a small home loan for improvements than mortgage finance to move when 20-30% deposits are common place. This trend is only likely to increase as mortgage finance becomes scarcer and I cannot see this trend reversing for several years to come.”

According to research by Lloyds TSB, however, a reluctance to spend money on home improvements has arisen as a result of the depressed housing market.

DIY and home improvement company Focus recently fell into administration after consumer spending on home improvement reached its lowest level since 1998. Simon Alport of Ernst & Young said, “UK retailers are facing one of the most challenging retail environments in recent times and the DIY sector has become highly competitive, with only the strongest players being able to thrive and survive.”

The overall expenditure on home maintenance fell by 9 per cent last year, from £17.8billion in 2009 to £16.2billion in 2010.

Despite this, housing economist Suren Thiu remained optimistic about the future of the housing market. He stated: “The current squeeze on household finances from high inflation and weak earnings growth has made it difficult for many households to spend as much as they used to on discretionary items such as home maintenance.

 “But the benefits of maintaining or improving your property are likely to ensure that, over the long term, the popularity of DIY will remain enduring.”

With reports from two leading names standing at such odds with one another, it is likely that the answer to the question posed: “Are we improving our homes?”, will remain, for now, a mystery.

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