July 16, 2007

Is The Sky The Limit To the UK Housing Market?

Is there any limit to the UK housing market  ? If an investor has a little ingenuity, and some back up capital, then the answer is a cool, ‘no.’  No, there is no limit. Not if you want to consider two 70 million pound homes that recently sold in the UK as ‘part of the market.  One home took 5 years to build and includes such modern improvements as a heated marble driveway, cinema, and bowling alley.

The point is, today’s investors are only limited by their vision. While most investors cannot hire the world’s finest artisans to build a 24 carrot floor, or a marble three level pool, they can take advantage of modern technology and use it to improve homes.

It is frustrating to read countless blogs that give investors bad information.  Buy a home, renovate, and flip.  However, renovating the wrong thing can be a waste of time.  Investing £5 000 to renovate a bathroom adds very little equity to the home.  However, adding a ‘green’ or energy efficient water heater, and updating the electrical system can substantially increase a property’s value.

The latest craze in London is adding a cinema to a basement. Many ‘on the edge’ homes, in the £300 000 range, can see substantial increases by adding a cinema to the basement. The investment, an average of £3 000 -£10 000, produces an equity increase exceeding the investment by 10 – 100%.

Thinking big does not mean spending big. Many investors in London have dramatically increased the value of their homes by adding a driveway. This is not always an option, but where it is, the investor should consider that improvement before adding a coat of paint and new rugs.

Investors should also follow decorating trends. The current trend is silk murals instead of wall paper. These often come in various oriental themes that add elegance, and sophistication to dinning rooms or bedrooms. 

The American trend of turning the master bedroom into a suite is also becoming a growing ‘selling point’ in the UK.  A master suite, complete with surround sound, shower, and dressing room is a major selling point for professionals.  Bold UK investors may also want to add another American invention – the packing room. A single room that is devoted to holiday wardrobes, suitcases, and a table in the middle of the room for packing – a must for any jet setting professional. The is still in short supply.

The sky is the limit, but first, must get ‘out of the box.’  

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