Whether you're adding an extension, updating the kitchen or bathroom, or even just adding a new coat of paint, investing in improving your property can add significantly to its value when you come to sell. Choose the right improvements and the value you add may outstrip the cost - and provided it's your main residence, you won't pay capital gains tax on any increase in value.
Things to consider before improving your home
Choose the right kind of home improvements to make
You'll need to find the balance between making it somewhere you want to live and making it attractive to future buyers.
Maintenance or renovation?
Assess whether your property is in poor repair and ensure that the basics of the property are sound before trying to make improvements.
Think like a buyer
What counts as a home improvement may be subject to taste and not all future buyers are going to appreciate changes that you make.
Get your Personalised Loan Quote to find out how much you can borrow.
How to finance your home improvements? Loan vs. Mortgage
There are a number of ways to fund the home improvements you want to make: through savings, budgeting your income or by borrowing extra money, either by increasing your mortgage or by taking out a personal loan. If you already have a mortgage then you may be able to borrow up to 90% of the value of your home, including your current mortgage with HSBC mortgages.
Think carefully before securing other debt against your home - if you don't keep up your mortgage repayments then your home may be repossessed.
Decide on what you can afford to commit monthly and how long it is realistically going to take for you to pay this back - if you can afford to repay the money you borrow over 5 years rather than 20 or 25, then a loan could be a better option.
- If you are using any part of this loan to pay off or reduce existing loan(s)/debts (including combining these into a single loan), it is important to consider not just the interest rate and monthly repayments, but also the term of this loan compared to the remaining term of your existing loans/debts.
- Spreading your payments over a longer term means you could end up paying more overall than under your existing arrangements, even if the interest rate on this new loan is less than the rates you are currently paying.
- You should also consider if any early repayment charges apply and if this form of borrowing is appropriate for your circumstances.
The National Association of Estate Agents rates a loft conversion as the home improvement that probably gives best value for money.