How Homeowners Could Use Equity Release for Home Renovations
Cooking-related programs have long been a staple on British television.
Older readers will remember the regular appearances of the late Phyllis Nan Sortain Pechey, better known as Fanny Cradock, who appeared in her own television series for two decades (1955-75), usually accompanied by her husband Johnnie.
Then there was the Galloping Gourmet with Graham Kerr, who always looked like he was having fun when he presented his cooking show (first airing in Canada), probably because of the sheer volume of wine he had. seemed to engulf.
More recently, onscreen cooking has made Keith Floyd and Nigella Lawson stars, while shows like Masterchef, Ready, Steady Cook and The Great British Bake-Off are staple for millions of people.
Ironically, while cooking programs are extremely popular, it is believed that a significant minority of people who watch them rarely cook for themselves.
They are also extremely popular with broadcasters because: a) they can attract large audiences and b) they are remarkably cheap to produce, especially when the “cast” is made up primarily of audience members.
They might be cheap, but in all fairness they’ve encouraged a lot more people to try their hand at home cooking, led to an explosion in cookbook publication, and encouraged a number of people to improve their domestic catering facilities.
The most popular form of home improvement, according to a survey conducted by Ideal Home, is installing a new kitchen. Every year, thousands of people modernize their kitchens, often making them larger, either to enhance the ‘entertainment’ function of their home or to create additional space where their culinary exploits can be applied and dare I say improved.
Of course, a new kitchen can also prove to be a valuable addition to the home.
Our ideas about what makes the perfect or most valuable addition to a home vary widely. Many people would say that adding an extension is more desirable than installing a new kitchen, as the extra space can be used for several different purposes, while the extra square footage is almost certain to have a positive impact. on the value of a house.
Ideal Home also points out that giving the garden a makeover can make a home more attractive, especially if the new or improved patio or garden space is able to accommodate friends and family outside during the holidays. a few days of the year when UK weather permits. reckless activity.
After 18 months in lockdown, it’s estimated that, assuming they can find a builder to do the job, over 60% of homeowners have planned some form of home improvement project in the next 12-24 months, including because in general, owners prefer to modernize and improve rather than move.
This willingness to improve, expand or upgrade has practical implications: it allows homeowners to avoid exorbitant stamp duty bills, legal fees, and the task of finding another place to live. It also allows people to transform their homes and create the living space they have always dreamed of.
Perhaps more importantly, since our homes have an “emotional value” that far exceeds their mere monetary value, preferring to stay in a property that has lots of happy memories is perfectly understandable.
Yet any time improvements are considered, no matter how large or small, cost is an important consideration. Fortunately, homeowners 55 and older have a number of options designed to help them get the most from their home without decimating their savings or other sources of income.
Equity release allows older homeowners to access a percentage of the cash value accumulated in their property, an accumulation that has typically occurred over many years.
The most popular form of stock release, known as life mortgage, allows people to clear a tax-free lump sum that can be reinvested in a new kitchen, extension or other form of improvement. (In fact, the money released can be used for any purpose.)
By undertaking such improvements, the value of a property could increase, thus offsetting some of the potential effects that freeing up equity can have on the value of an individual’s estate.
Unlocking equity in the family home is an important decision and should not be taken lightly. The process could reduce the value of a person’s estate and impact their entitlement to means-tested state benefits.
So it is essential that before you book the builders or order a new kitchen in which you can consider transforming yourself into a modern take on Nigella Lawson or Graham Kerr, get a personal illustration of how freeing up equity could working for you is likely to be of greater importance.
* Apparently, Kerr only pretended to take big sips of the wine.