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The UK government have submitted new proposals that recommend Buy To Let landlords and home owners who apply for permission to make repairs and improvements to their properties are encouraged to make additional improvements at the same time as other ongoing works in a bid to make properties greener.

However the proposals fail to fully account for where the UK PRS landlords are expected to find the money for such extra improvements or even if such improvements will prove to be beneficial to tenants.

Conservative MP Tim Yeo said “The new proposals will effectively force landlords to complete non-essential improvements aimed at improving energy efficiency at the same time as they make minor repairs or improvements to their rental properties. If they refuse they could be denied permission to make essential repairs by their local council.”

It is also widely thought that the UK coalition government want to introduce a scheme that means all property repairs, such as the installation of a new boiler or central heating system, are logged with the council.
The council will then ‘recommend’ additional improvements, such as new double glazing or loft insulation that will also need to be carried out in order to get permission for the boiler installation.

The proposed costs of the ‘recommended’ improvements could be offset using the new government Green Deal scheme due to be launched in October 2012.

Mr Yeo commented on the proposals saying; “You’ve got to find ways of making the public more enthusiastic about energy efficiency and I think compelling people who have applied for planning consent to make some alteration to their home isn’t necessarily going to help.”

The UK mortgage market is warning potential borrowers that there has been a sudden surge in the number of mortgage providers lowering how much they will lend for an interest-only mortgage deal.

Nationwide, Santander, and Coventry Building Society are among the mainstream mortgage lenders that have reduced their Loan-To-Value (LTV) ratios on their interest-only mortgages to just 50%.

The announcement comes as little surprise to seasoned property professional who have seen the pattern repeatedly. The reduced LTV values will immediately affect new borrowers, however, changes will come into effect if homeowners need to borrow additional money against the value of their property to fund home improvements, as they will be treated as new loans and the amount will be limited to approximately 50% of the property value

Moneyfacts spokesperson, Sylvia Waycot, said “The development applies to new borrowers only, so anyone with existing interest-only deals at higher LTVs need not worry. However, the end result is that many people who chose an interest-only mortgage because it was cheap, are at their maximum monthly outgoings and will find themselves unable to move should they need to, or borrow for improvements – which means they are in fact under a form of house arrest.”

Many UK homeowners traditionally plan to do major DIY projects to their properties during the extended Easter break, in a bid to improve living conditions and also in the hope of increasing the perceived value of their homes.

However, a new survey from HSBC claims that DIY improvements are not worth it anymore as DIY projects were adding less value to a property than they were a year ago.

According to HSBC’s valuation experts, a loft conversion is the safest investment, typically increasing the value of a residential property by £16,152, although the gain is 23% down on 2011.

An extension could add £15,665 (3% down), while a new kitchen may boost the value of a home by £4,577 (19% down).

The only major home improvement work to increase the relative return-on-investment in the past year is a new conservatory, putting on an average £9,420 in value to the property, up 14% on 2011 figures.

The survey also highlights that regional variations need to be considered when tackling home improvements.

For example, a residential property fitted with a new kitchen in London should increase the property’s value by an average of £9,125 (GBP), compared with £4,300 (GBP) in North-East England and £2,333 (GBP) in Scotland.

Paul Cutbill, Valuation’s expert at Countrywide Surveying Services, says: “Whilst sensibly improved and well presented homes will generally be attractive to potential purchasers, rising labour and material costs mean that the gap between the cost of improving and monies realised at the point of any sale has been reduced. Poor quality work and a lack of proper design, usually resulting from inadequate project budgeting and planning, can have a significant negative knock on effect to any added property value”.

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