Home improvements become popular as house prices fall

By MoneyhighStreet Staff. Published on August 4, 2008 This post currently has no comments.

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As uncertainty about UK property continues, homeowners are increasingly opting to take their dwellings off their property off the market and use loans to fund building work, a new study has shown.

Research from Lloyds TSB found that 59 per cent of homeowners who had been planning on selling their property have instead taken it off the market until the impact of the economic slowdown becomes clearer.

What''s more, the survey showed a 19 per cent rise in the number of homeowners using personal loans to fund building work.

In total now, 55 per cent of consumers plan to undertake improvements to boost chances of a sale in today''s less buoyant market. Nearly a quarter said they hope the work will hopefully mean they can recoup any potential fall in house prices by adding long-term value.

"For the last decade homeowners have been able to sit back and rely on rising property prices to increase the equity in their home but sadly this is no longer possible," explained David Wishart, director of personal loans at Lloyds TSB.

"If you want to trade up and avoid substantially increasing your mortgage, you''ll need to add value to the house you''re currently in."

Reports suggest that Halifax will reveal figures later this week that show that house prices are falling at a rate of more than ten per cent year-on-year.