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Homes 'growing' there way out of the recession

Wednesday, 29 April 2009 4:13 PM

AA Personal Loans have found a quarter of homeowners will add an extra room to their house before the end of the recession.

The research from AA found that as house prices have dropped, homeowners are taking a longer term view of their property, seeing them as a 'home rather than an investment'.

The AA said one of the most popular reasons to build an extra room was for entertaining, with an extension for an office closely followed behind. Some five million people have decided against selling their home because of the recession, while over six million will be renovating their property this year, according to the research.

Mark Burgess, editor of Estate Agency Times said: "Even though the nation is collectively tightening its belt as the recession rolls on, it's not that surprising that many homeowners are bucking the trend by taking out home improvement loans to renovate their properties.

"Understandably some people might not be keen to take out a personal loan at the moment, but additional bedrooms or reception rooms typically add the most value to a property and both can easily serve as an office, something that will benefit many who are changing their working habits."

Some 57 per cent of those asked in the survey said they were renovating their home to create a nicer living space; rather than to add value to their home. Regional analysis found homeowners in the south-east were more likely to build entertaining space, in the north were more likely to build extra bedrooms, and in Scotland homeowners were taking on office build projects.

Mark Huggins, head of AA Personal Loans, said: "Although many would expect demand for home improvement loans to be less during the recession, our figures show that their popularity is actually unchanged.

"As long as the recession keeps impacting property values, we're not expecting that to change as homeowners continue to make improvements, albeit for their own needs, not necessarily the needs of a future owner."

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