Opinion: Equity release could help fund home improvements
- Credit: Getty Images/iStockphoto
Cookery-related programmes have long been a staple of British television.
Older readers will recall regular appearances by the late Phyllis Nan Sortain Pechey, better known as Fanny Cradock, who featured in her own TV series over two decades (1955-75), usually accompanied by her henpecked husband Johnnie.
Then there was the Galloping Gourmet featuring Graham Kerr, who always looked as though he was having a good time when presenting his cookery show (first aired in Canada), probably because of the volume of wine he appeared to gulp down.
More recently, on-screen cooking has made stars of Keith Floyd and Nigella Lawson, while shows such as Masterchef, Ready, Steady Cook and The Great British Bake-Off are essential viewing for millions.
Ironically, while cookery programmes are extremely popular, it’s believed a sizeable minority of people who watch them rarely cook themselves.
They’re enormously popular with broadcasters too because: a) they can attract large audiences and b) they’re remarkably cheap to produce, especially when the ‘cast’ is made up primarily of members of the public.
Cheap they might be, but in fairness they’ve encouraged a lot more people to try their hand at home cooking, led to an explosion in the publication of cookery books and encouraged a number of people to enhance their domestic dining facilities.
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According to a survey conducted by Ideal Home, the most popular form of home renovation is installing a new kitchen. Every year, thousands of people upgrade their kitchens, often by extending them, either to improve their home’s ‘entertainment’ function, or else create additional space where their culinary exploits can be applied and, dare I say, improved.
Of course, a new kitchen can also prove a valuable addition to the home.
Our ideas of what constitutes the perfect, or most valuable, addition to a home varies considerably. Many people would argue that adding an extension is more desirable than installing a new kitchen because the extra space can be put to several different uses, while additional square footage is almost certain to have a positive impact upon a home’s value.
Ideal Home also point out that giving the garden a makeover can make a home look more attractive, particularly if the new or improved patio or garden space is capable of accommodating friends and family outdoors on those handful of days each year when the British weather permits such reckless activity.
After 18 months of being locked up, it’s estimated that, assuming they can pin down a builder to do the work, more than 60% of homeowners have some form of home improvement project planned over the next 12-24 months, not least because in general, property owners prefer to upgrade and improve rather than move house.
This willingness to improve, extend or upgrade has practical implications: it ensures homeowners avoid eye-watering stamp duty bills, legal fees and the task of finding somewhere else to live. It also ensures that people can transform their homes and create the living space of which they have always dreamed.
Perhaps most importantly, as our homes have an ‘emotional worth’ which far exceeds their simple cash value, preferring to stay in a property that possesses lots of happy memories is perfectly understandable.
Yet whenever considering improvements, on whatever scale, large or small, cost is an important consideration. Fortunately, homeowners aged 55 and above have a number of options designed to help them get the most from their home without decimating savings or other sources of income.
Equity release allows older homeowners to access a percentage of the monetary value built up in their property, an accumulation that has usually occurred over many years.
The most popular form of equity release, known as a lifetime mortgage, enables people to release a tax-free lump sum which may be re-invested in a new kitchen, an extension, or another form of improvement. (In fact the money released can be used for any purpose.)
By undertaking such improvements, a property’s value could increase, effectively offsetting some of the potential effects releasing equity may have on the value of an individual’s estate.
Releasing equity from the family home is a big decision and should not be taken lightly. The process could reduce the value of a person’s estate and impact upon their entitlement to means-tested state benefits.
It is vital, then, that before booking the builders in or ordering a new kitchen in which you may plan to transform yourself into a modern-day version of Nigella Lawson or Graham Kerr, obtaining a personal illustration of how equity release might work for you is likely to be of greater significance.
*Apparently, Kerr only pretended to take great swigs of wine.