Many property owners are spending in order to beat the downturn and make their home work harder.
There is no end to human ingenuity. In the depths of a recession we regroup, rethink our lives, our houses and our spending. Take, for instance, Andrew Porter and Abigail Ashton, whose perfectly ordinary three-bedroom semi in north London has recently acquired a glamorous bespoke studio at the end of the garden, with a heated paddling pool, sandpit and fire-pit for their twin girls Mimi and Ella. They now work from home in the studio and the quality of their lives has improved immeasurably.
It wouldn’t have happened without the downturn in the economy. Andrew and Abigail were gifted architects with a practice in the West End which suddenly had to slim down. “We thought what we could do with five-years’ worth of rent on an office in central London,” says Andrew.
The sleek corrugated studio, built of stressed plywood, with a kitchen and a lavatory, has been included in the Architecture Open exhibition at the Royal Institute of British Architects.
It didn’t need planning permission as it lay within the bounds of “permitted development”. They built much of it themselves for between £120,000 and £140,000, and now have a prototype to show potential clients.
It is a strange fact that, in spite of the paralysis in the property market across most of the country, the amount we spend on property is increasing. The expected drawdown of equity out of property during the recession has not happened in the way experts predicted. In fact Bank of England figures show that in the last few months of 2010 an extra £7.1 billion went into property, followed by another £5.8 billion in the first few months of this year.
Kate Reinold of the bank’s structural economic analysis division believes this is partly because people cash in equity when they sell, but, as transactions are low, this isn’t happening. Prices are also on average 13 per cent lower than they were in 2007, so there is less money to withdraw. Yet something else is happening too. Across the country, estate agents are being called by owners and asked for advice on how to spend on their properties. They are investing for the magic moment when the market finally turns upwards.
Our spending now is shaped by when we think the recession will end. Findings from estate agents Knight Frank with Markit show that hope among home owners for an upturn in the next 12 months dwindled during October. Those in London and the South East are the most upbeat and those in the North and the South West are the gloomiest. Only households earning more than £58,000 a year are expecting the value of their homes to increase in the next year.
Among the optimists are Chris and Karen Jackson, who bought a pretty cottage four years ago in the conservation area of Liphook, Hampshire.
“I tore up the carpets, rushed to get back to the beautiful wood floors, de-cluttered it and removed all paint and wallpaper. I just let it breathe again,” says Chris. Out went the Laura Ashley, in came the Farrow & Ball. But they stuck to essential work. “We didn’t put in new bathrooms but we put in a kitchen because we love to cook.”
They also kept an eye on house prices. They know they are in a desirable village which sells, so the cottage in The Square is now on the market with Strutt & Parker (01428 661077) at £675,000.
Chris, a banker, and Karen, a solicitor, have the restoration bug and are moving to a “total wreck” which needs a complete overhaul. “Put it this way. I know this house will be worth £50,000 or £60,000 more in three years’ time.”
So they still believe in property? “Houses of quality, in the right area, which have had the right things done to them, will sell. I am sure of it,” says Chris.
All depends on where you live. In London, where prices have continued to rise, recessionistas are busy improving what they have. Hamptons International lettings departments in Fulham and Wimbledon report home owners taking short lets while work is done on their houses.
In the country, agents are cautious. Michael and Eileen Travallion, selling their four-bedroom thatched cottage in Shalbourne, Wiltshire, were advised by Knight Frank not to spend on anything more than a lick of paint. The asking price is £775,000 with “scope to improve”. “They said there is a shortage of good village properties,” says Michael. “We have already had a lot of viewings so there is no shortage of buyers.”
Nick Forman, of Freeman Forman on the Kent/East Sussex borders, is routinely asked for advice.
“A couple had bought a £900,000 rundown house and got planning consent to extend it by 50 per cent at a cost of around £250,000,” he says. “They wanted to know if they would get their money back. My advice was that if it was their 'forever house’, then do it, but if they wanted to recoup their money in a year or two they would be very unlikely to do so. They would have out-priced the properties they were surrounded by.”
But someone else with a smaller country cottage at £450,000 was offered a strip of land by a neighbour. “It would give the house far greater appeal and significantly increase the value, so in that case spending the money was worth it,” he says.
Too much luxury these days is not a good thing. The £50,000 swimming pool is not worth doing.
“Life changes in ways we can’t predict, especially in these troubled times,” says Nick. “You have to ask yourself, what if you lose your job or have a health problem? Could you sell your property quickly?”
He errs on the side of caution, and believes the upturn in the market won’t happen until 2014 or 2015.
Kate Reinold of the bank’s structural economic analysis division believes this is partly because people cash in equity when they sell, but, as transactions are low, this isn’t happening. Prices are also on average 13 per cent lower than they were in 2007, so there is less money to withdraw. Yet something else is happening too. Across the country, estate agents are being called by owners and asked for advice on how to spend on their properties. They are investing for the magic moment when the market finally turns upwards.
Our spending now is shaped by when we think the recession will end. Findings from estate agents Knight Frank with Markit show that hope among home owners for an upturn in the next 12 months dwindled during October. Those in London and the South East are the most upbeat and those in the North and the South West are the gloomiest. Only households earning more than £58,000 a year are expecting the value of their homes to increase in the next year.
Among the optimists are Chris and Karen Jackson, who bought a pretty cottage four years ago in the conservation area of Liphook, Hampshire.
“I tore up the carpets, rushed to get back to the beautiful wood floors, de-cluttered it and removed all paint and wallpaper. I just let it breathe again,” says Chris. Out went the Laura Ashley, in came the Farrow & Ball. But they stuck to essential work. “We didn’t put in new bathrooms but we put in a kitchen because we love to cook.”
They also kept an eye on house prices. They know they are in a desirable village which sells, so the cottage in The Square is now on the market with Strutt & Parker (01428 661077) at £675,000.
Chris, a banker, and Karen, a solicitor, have the restoration bug and are moving to a “total wreck” which needs a complete overhaul. “Put it this way. I know this house will be worth £50,000 or £60,000 more in three years’ time.”
So they still believe in property? “Houses of quality, in the right area, which have had the right things done to them, will sell. I am sure of it,” says Chris.
All depends on where you live. In London, where prices have continued to rise, recessionistas are busy improving what they have. Hamptons International lettings departments in Fulham and Wimbledon report home owners taking short lets while work is done on their houses.
In the country, agents are cautious. Michael and Eileen Travallion, selling their four-bedroom thatched cottage in Shalbourne, Wiltshire, were advised by Knight Frank not to spend on anything more than a lick of paint. The asking price is £775,000 with “scope to improve”. “They said there is a shortage of good village properties,” says Michael. “We have already had a lot of viewings so there is no shortage of buyers.”
Nick Forman, of Freeman Forman on the Kent/East Sussex borders, is routinely asked for advice.
“A couple had bought a £900,000 rundown house and got planning consent to extend it by 50 per cent at a cost of around £250,000,” he says. “They wanted to know if they would get their money back. My advice was that if it was their 'forever house’, then do it, but if they wanted to recoup their money in a year or two they would be very unlikely to do so. They would have out-priced the properties they were surrounded by.”
But someone else with a smaller country cottage at £450,000 was offered a strip of land by a neighbour. “It would give the house far greater appeal and significantly increase the value, so in that case spending the money was worth it,” he says.
Too much luxury these days is not a good thing. The £50,000 swimming pool is not worth doing.
“Life changes in ways we can’t predict, especially in these troubled times,” says Nick. “You have to ask yourself, what if you lose your job or have a health problem? Could you sell your property quickly?”
He errs on the side of caution, and believes the upturn in the market won’t happen until 2014 or 2015.
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