Home Improvements the new norm?

In a recent trends report carried out by Rated People it shows the level of customer desire for home improvements and therefore the required need to raise capital for their planned works.

Home improvements tops many peoples wish list for 2021 and this just happens to coincide with £250bn of mortgage product maturities, which is up almost 50% on 2020.

Whilst many of these clients will be reviewing their current mortgage situation, they may also be considering additional borrowing to fund home improvements, perhaps to accommodate a change in lifestyle.  If not already doing so, we would urge you to contact your existing customers and discuss their requirements.

The reports also shows us that the pandemic has changed UK home priorities when it comes to what they want from their homes. They state that many of the UK populous want to add space to their current homes.

  • 55% of the UK worked from home in 2020 but many did not have the home space they needed
  • 38% of respondents said they wanted to improve or create home offices in 2021.
  • 43% of the UK plan to work more from home even when COVID-19 restrictions are lifted

Is there any wonder, when the survey showed, of those working from home:

  • 41% don’t have a proper desk
  • 39% don’t have an office chair
  • 29% have to clear toys off their “desk” each day
  • 24% are embarrassed by the background
  • 22% work sitting on the floor

Rated people state that ‘home office’, as part of home improvements, massively increased in the run up to 2021. By 139% for those wanting a garden room and 104% increase for additional rooms within the home and 51% increase in those wishing to have a studio construction. They go on further to predict that home office improvements will be one of the biggest trends of 2021.

Furthermore, outdoor space has become all the more important following the pandemic with 64% of UK residents say they wouldn’t even buy a house without a garden now, where those that already do have gardens 47% have stated that they will be making improvements in the coming year.

Whilst you are talking to your customers about new mortgage rates, you may find they have additional borrowing needs.  In the main these requirements can be satisfied by a further advance or a new mortgage with an alternative lender.  But what happens when these options aren’t available or accepted by a lender? Especially if the pandemic led to a change in circumstances.

A second charge mortgage could be the answer.

  • Rates from 3.37%
  • 100% LTV available (140% for small loan sizes)
  • Lenders will also consider 100% of regular bonus, commission and overtime
  • Impaired credit, CCJ’s, defaults, IVA and DMP’s
  • Previously furlough workers who are back working
  • Mortgage payment holidays with proof of returned full payments
  • Secure on Buy to Let

Furthermore, you might be talking to customers who are have early repayment charges, tied into he current mortgage or unable to move the mortgage due to it being restricted by interest only options or increase in payments if moved to a repayment basis.  If further borrowing is needed, a second charge can also help.

Why a second charge mortgage could be the solution:

  • Your client’s current mortgage has a high early repayment charge.
  • Your client may be on a competitive mortgage rate they wish to retain.
  • Your client may have an interest only first charge
  • For affordability reasons e.g. complex income
  • High LTV required
  • Your client has a poor credit profile

A second charge can be used to fund any legal transaction, which might be:

  • Home improvements
  • Debt consolidation
  • Investment for another property purchase
  • Business purposes
  • Gifting deposit
  • Tax bills
  • Weddings