Your home isn’t simply just a place to live, it’s likely your largest asset! By making carefully considered improvements over time, you could increase the equity your home holds. If you’re eager to start building equity, let’s first understand the basics…
What is equity?
In simple terms, equity is the portion of your property's value that belongs to you, the homeowner, outright. This means it's free of any debts or obligations related to the property.
As you pay off more of your mortgage, or as the property's value increases over time, the equity in the house typically grows. You can release equity from your home by remortgaging to gain access to extra funds, which can be used in whatever way you desire. A mortgage adviser will be able to help you with this.
Keep in mind that if you remortgage early, you may face early repayment charges.
Now we’ve pinned down what equity is, let’s explore how you can build it through making improvements to your home…
Ways to boost equity
1. Focus on energy efficiency
Having an energy inefficient home isn’t just hard on your wallet when your energy bills need to be paid, it can also have a negative effect on your home’s equity.
Your home’s energy efficiency is determined by an Energy Performance Certificate (EPC), which rates your property on a scale from A to G, with A being the highest and most energy efficient.
There are various ways to improve your EPC rating. Consider finding ways to enhance the heating and water efficiency of your home, perhaps investing in better insulation for your roof spaces and walls, or upgrading your boiler. Buyers love energy efficient homes, and it’s good for your wallet too.
Check out this article to get a sense of what different energy efficient improvements might cost you (It might not be as much as you think).
2. Extra energy improvements
If improving your EPC rating has given you the buzz to improve your energy efficiency further, there’s still plenty more you can do in your home.
For example, opting for cleaner energy options, such as installing solar panels, could be beneficial. If your windows and external doors are looking worse for wear, consider replacing them or upgrading them to a superior standard.
While these methods may present greater initial costs, they’ll pay dividends in reducing utility bills and by making your home more attractive to eco-conscious buyers, driving up its market value.
3. Renovate your kitchen and bathroom
When it comes to upgrading your home's interior, two rooms should be at the top of your list. Through years of daily use and ever-present moisture, your kitchen and bathroom are most likely in need of an upgrade.
Making a variety of improvements to these rooms can boost your home's value. Take a close look at these areas and seriously think about whether you need to update appliances, replace countertops, and refresh the space to appeal to potential buyers. Even making simple aesthetic improvements, such regrouting tiles and performing a deep clean, can have an impact.
4. Upgrading the exterior features
Between wet winters and dry summers, keeping your home’s exterior looking tiptop can feel like an uphill struggle. But, it's a struggle worth enduring, as investing the time and money in improving and maintaining your exterior can have a big impact on the value of your home and its equity as a result.
By regularly cutting the grass, weeding, planting flowers and maintaining trees, you can use nature to your advantage, creating an attractive natural exterior to your home. A serious power wash of your drive and paving can roll back decades worth of dirt and grime, giving the once-aged surfaces a fresh and pristine look. If these surfaces are beyond repair, perhaps consider investing in an entirely new surface.
5. Make the outdoors great again
When you’re satisfied that the exterior of your home is looking its best, there’s still more you can do to add serious value to your home through its outdoor space.
Investing in decking or a patio space is a great way to add value to your outdoor space. Regular maintenance and cleaning will ensure these features will continue to retain the value they add to your home and stay appealing to future potential buyers.
6. Smart technology
If you’re someone who loves the latest technological advancements, there’s a plethora of smart technology you can incorporate into your home.
Bring your home into the 21st century with smart lighting, inbuilt audio systems, programmable thermostats, and security systems to protect your property.
While appealing to tech-savvy buyers, it’s important to consider if the technology will add real value to your home and its equity before you invest in it. Beware of being caught up in a passing tech fad.
7. Refresh interiors by painting
Sometimes it's the simple things that can make a big difference. Crack open the paint can, whip out your brushes and remember the masking tape. Not only will a fresh coat of paint brighten your home up, it also presents a prime opportunity to fix any blemishes in plastering. Consider sanding down or replacing damaged skirting boards beforehand - leaving your home with a stunningly clean finish.
While it’s important to add your own personality into your home, make sure you strike a fine balance between the personal and the appealing. If you’re looking to sell soon, you should choose neutral colors that appeal to a broad range of tastes.
8. Regular maintenance and improvements
It’s always nice to maintain your home to a high standard, but it becomes more necessary when you’re building equity. Just because you’ve improved your property, it doesn’t mean the job is done.
Keep an eye on your home’s condition and perform regular maintenance when necessary. Don’t let your hard work go to waste.
9. Convert unused spaces
We can get used to the layout of our homes, but it pays to look at things with an open mind and dash of ingenuity when it comes to how you use spaces.
Take a good look at the space you have and see if there’s anywhere you can get more use out of. This could be converting your loft space into a bedroom, reclaiming an unloved basement into a games room, transforming a small nook into a cosy reading corner, or transforming an unused bedroom into a modern office. There’s a wealth of possibilities when it comes to how you can use the space available to you.
10. Expand your available space
While requiring a larger investment in terms of time and money, adding an extension to your home can add significant value, boosting the amount of equity you can pull from your property.
According to Checkatrade1, the average cost for a 20m2 extension is £48,000, and has the potential to add 10 to 20% onto your the value if your home.
When it comes to adding an extension to your property, give it proper time and consideration. Most importantly, make sure you receive all relevant planning permissions before you start the build.
Ready to make a start?
Building your home’s equity is a combination of considered decision-making, regular maintenance, and tasteful renovations. Hopefully, the tips above inspire you to make changes in your home and kickstart your equity building journey.
If you’d like to find out more about getting the most out of your home and how using your home’s equity can help you, our expert advisers are here to help. Get in touch with us today.
References:
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Related Articles
A guide to extending your home
