How to add value to your property

People do up their homes for various reasons, such as making them more attractive or repairing damage caused by wear and tear. However, adding value to the property is the number one motive. This motive is often fuelled by the desire to sell, now or in the future, to make a profit, whether the intention is to downsize, fund a new home, or develop a property.

Whatever the reason, you will only add value to your property if the money spent on the house is lower than the property’s ceiling value. Just because you spend £20,000 on a property doesn’t mean you will make a profit or even get it back. Most areas have a ceiling or guide price that you should check out before you make a decision. Click here to check the value of other properties in your area and speak to a financial advisor.

Investing in Property Value

large changes to a house hold can increase the value of a property significantly, as long as it is still reasonable for the area. Here are a few of the top large investment ideas.

Basement Conversion: If your house has a basement that is not yet converted into a living space, get yourself a quote asap! Basement conversions on average increase property value by around 30%. While it may be possible to add a basement to an existing property, the complications of doing this can cause the cost to be very high and take a long time, meaning this may not be a profitable move.
Loft Conversions: If you can’t go down, try going up! Loft conversions are very popular these days as they can add an extra bedroom and even a bathroom to the house. Once you have been able to get planning permission that is. This is ideal if you have the space for a new stair case. If you have a flat roof, consider converting to a pitched roof!
Garage Conversion: The garage space its self can easily be converted into an additional room, simply by converting the garage door into a brick wall with a window. You can also add a front door and ensuite bathroom to create a studio apartment, creating a perfect care home for elderly or unwell family members looking to retain their independence.
Barn Conversion: Barn conversions are a great way to add value, especially if they can be rented out. Not only do you have the benefit of profit when selling, but also throughout the year.
Layout changes: Sometimes properties are built with unusual layouts that do not fit with the way we live our lives. This doesn’t just mean adding bathrooms and moving kitchens, but also building and knocking down walls, moving windows and doors, even stair cases if necessary!
Porches & Conservatories: Porches are a great little addition to any house, it creates a space where family members and guests can remove outdoor shoes and clothing, limiting the mess inside the house. Conservatories not also serve the same purpose as the porch, but also make great play rooms, offices and relaxation/entertainment spaces. Just make sure you invest in underground heating and a solid roof to help with temperature control.
Extensions: Many detached or semi detached houses have an entry way to the garden round the side of the house. Extending the house into this area will most certainly add value, whether it is for a garage/utility room, bedroom, apartment or simply to expand the size of existing rooms. You may even prefer an extension at the back of the property!
Landscaping: There are 2 ways you can use landscaping to add value to a house, the first option is to keep things simple, level ground with grass or slabs. The second way is to turn your garden into a paradise, add a pond plant beautiful trees and flowers, maybe even an outdoor kitchen or summer house!

Smaller Changes

If you don’t have the time and money to invest in your property, smaller changes can add value to make your home more appealing to potential buyers, and help ensure your property chain is motivated to reach completion.

New windows & doors
New boiler & gas safety certificate
Electrical safety
Kitchen renovation
Bathroom renovation
Plastering
New flooring and carpets
Painting / Wall papering
Skirting & coving

While some of these must be completed by professionals, there are other ways you can increase the value of your property yourself without breaking the bank

Funding Recommendations

If you do not have sufficient savings to invest, you can consider financing improvements with a bridging loan. Bridging loans are large, short term secured loans that let you quickly release equity in your property to increase the overall value. Unlike a mortgage, there are no repayments until the property sells or the loan term ends. You can make the most of your bridging loan by making sure materials, planning permission, and contractors are in place, so work can begin and finish as soon as possible.

If you are ready to make a larger profit in a shorter time frame and move on to your next home, renovating is the key to selling quickly.

Friends Capital has access to lenders with the best bridging loan rates on the market today. Contact us to learn more or apply here.

Bridging Loan Application

A Simple Guide To Secured Loans

If you need money for any purpose, you may be considering a loan, and you will need to know the difference between an unsecured and secured loan. An unsecured loan is offered based on your credit score and circumstances, whereas an asset backs a secured loan with its financial value, making it easier to attain.

The financial asset could be a car or home, and the lender may use it to recoup the outstanding loan value if you fail to pay. This security gives lenders confidence to lend to you and motivates you to make your payments on time.

The benefits & drawbacks of secured loans

There are benefits and drawbacks to taking out a secured loan. Secured loans usually have a lower interest rate, and you can borrow a more considerable amount. However, your collateral is at risk, and approval usually takes longer compared to unsecured quick loans.

There are also different types of secured loans:

Vehicle loans – This type of loan is secured against a car, truck, boat, motorcycle, or lorry.
Bridging loans – These are short term loans lasting between 1 and 18 months. You can take out a bridging loan and use the money for any purpose. Interest is rolled into the loan, which means there are no payments until the loan’s end when the value and interest become due. At this point, you can either pay back the loan or refinance it.
Property development loans – These are similar to bridging loans, but they are for property developers. Developers use the funds to buy land, pay for renovation and building work, or free up working capital.

If a secured loan defaults, the lender may repossess your car, or you might lose your home or any other collateral you leveraged to attain the loan. The lender can put a lien on your asset, which is essentially a lender’s claim to the security. The loan company can take ownership and sell the property or vehicle to recover their losses. You may still end up owing money if the sale of the asset doesn’t cover the outstanding loan amount and interest.

Top 3 FAQs

Are secured loans easier to get than unsecured loans? Yes, the security shows that you have the means to pay back the loan, even if you were to lose your income.
Do secured loans affect your credit? If you default on the loan, you may end up with bad credit, and the default will remain on your credit report for up to seven years. If you get into financial trouble, make your lender your first call, who may be able to help by restructuring your payments.
How can I get out of a secured loan? You can repay the loan or refinance the loan.

Friends Capital have access to the cheapest bridging loan rates available to any borrower on the market today. Contact us today to learn more about what we can do for you.

Options For When You Need A Short-Term Loan

For borrowers looking for short term loans, there are loads of great options. In this article, we are going to lay out the pros and cons of some of the most popular short-term loans, so that our readers can be as informed as possible.

Payday Loans

Payday loans (also known as ‘quick cash’ or ‘quick loans’) are among some of the most accessible loans out there, often seen to be a good fit for people with bad credit who need money quickly. Some lenders even offer access to cash within 24 hours. Applications are quick and easy, either done over the phone or via an online form. The process can take minutes. The majority of loans, like mortgages or business loans, require extensive credit checks and personal information. Payday loan companies only need a few essential criteria to be fulfilled. These include having a stable income and a bank account. It is easy to see why quick and fast cash without many barriers would be attractive to borrowers.

They also aren’t secured to a property, so if you’re unable to pay your house isn’t at risk. That doesn’t mean there aren’t huge risks. Payday companies are known for passing debts to collection agencies and taking debtors to court. Payday loans are highly expensive, with costs rising exponentially as the debt goes unpaid. It is by far the loan with the highest interest, two or three times higher than credit cards and personal loans. They don’t help you build a credit score, and are considered predatory due to their focus on people who are in desperate circumstances and can’t go anywhere else.

Credit Cards

A credit card is a loan that gives you a line of credit of a pre-accredited amount, called a ‘credit limit’. When you spend that money, your bank or credit card company loans you that money to make a purchase. Credit cards involve monthly payments either for the whole debt, a partial amount or for a monthly minimum payment. Most card companies give users a grace period of 20 to 30 days before any interest is put on top of the amount they owe.

With credit cards, you can buy now to pay later. You don’t have to set out a repayment schedule like with bridging and payday loans. The money is available, and you can organise how to pay it when it is convenient for you. Credit cards are flexible – you choose how much you repay. The minimum monthly repayment is often very low, between £5 and £25, so you don’t have to find the money right away or pay it off in one go at all.

Credit card debt can build up gradually, making it dangerous for people with excessive spending habits. The cost of spending on a credit card and repaying it within a few months is often reasonable. However, when debt is left unpaid, debt can mount up quickly. Missing payments can significantly damage your credit score, affects your ability to make large purchases like buying a home.

We strongly recommend getting unbiased and free financial advice from sites like the moneyadviceservice.org.uk and moneysavingexperts.com or debt consolidation companies before going down either of these avenues so that you can learn more about sensible and responsible borrowing.

Bridging Loans

Bridging loans are different to the above lending options as they are large amounts secured against a property or asset.

Bridging loans act a bridge between when funds are needed and when funds are going to be released from an asset, most commonly a property. Individuals, property development companies, and corporations use bridge loans to provide funds on short-notice notice. Bridge loans can be small and large loans.

Bridge loans are priced monthly instead of annually because they are designed to be taken out only for short periods. They have higher than usual interest rates because funding is easily and quickly accessible. Credit histories aren’t as relevant as, for example, mortgages because bridging loans are secured against an asset.

Borrowers should be aware that they should have a clear repayment plan in place; this involves typically selling a property at a later date or remortgaging the house in question. Most bridging loans have predictable costs when there is an exact repayment schedule.

We have access to lenders with the best bridging loan rates in the UK. Contact us to learn more or apply for a short term bridging loan here.