On the one hand it was great to see the Government recently relaxing the planning laws to allow more property extensions to take place. But I do wonder how they are going to be funded.
Many clients are already mortgage prisoners due to the demise of interest-only, self-cert, adverse credit and changes to personal circumstances. The net result has been that they cannot touch their mortgage.
Those that are able to consider adding the cost of an extension to their mortgage now face the extra challenge of having to switch the whole loan to repayment for exceeding LTV limits, shortening the term of the loan to meet maximum age requirements and the loss of a fantastic SVR as a new product will be forced upon them.
Whenever you remortgage for home improvements it is a gamble. Is the work you are doing going to add value to the property above and beyond the cost of the improvements?
Nowadays there are so many other factors that you need to consider that giving best advice will become even more challenging.
All in all the news will be better received by the lenders as it gives them more opportunities to tidy up their back book.
I don’t think it will create much activity in the real world though as simplified planning permission is one thing, but without simple funding it will remain in the blocks.