There are many benefits to adding house extensions in the West Midlands, but the value of doing so has increased with the latest data showing a continued decline in property prices.
According to the latest Halifax House Price Index, covering December 2022, the average home increased in value by just two per cent over the course of last year, down from 4.6 per cent in the 12 months to November 2022.
The reason for this was the strong increase in prices in the first half of the year being counterbalanced by an outright decline in the later months as the impact of the wider economic malaise took effect.
Following the 2.4 per cent decline in November, there was a further drop of 1.5 per cent in December. Moreover, director of Halifax mortgages Kim Kinnaird did not see the lower rate of fall in December as a sign of the market bottoming out, predicting instead that a combination of recession and higher interest rates means prices will fall by eight per cent in 2023.
Householders may therefore consider a home improvement as a good investment to increase the value of their property, but that is not necessarily the only reason for doing so. Those looking to upsize might find adding space offers an alternative to trying to buy a larger house.
The benefit of the latter is that people can work with designers on getting just the sort of extension they want, whereas a depressed housing market with limited supply might make fining the ideal home hard to do.
While Halifax predicts an eight per cent fall in prices this year, Japanese bank Nomura has predicted a gloomier outlook for prices, with a 15 per cent decline by the middle of 2024.
Its panel of economists acknowledged that their forecast was gloomier than most, describing it as “a larger fall than assumed by the Bank of England, Office for Budget Responsibility and consensus.” They said this sort of decline would be needed to normalise the balance between squeezed incomes and higher interest rates.