“Well, summer’s officially over,” declared the middle aged electrician as he shuffled through the front porch door and out of the light drizzle, carrying enough equipment to build, or at least service, a decent-sized electricity substation. In fact, his relatively straight forward task is to fit a handful of new spotlights and a few much-needed double sockets on one side of the kitchen oddly devoid of electric power.
He is one of several tradesmen to pay a scheduled visit recently, along with teams of plasterers, bricklayers, plumbers and window fitters; only the carpenter and our weather-forecasting electrician were unaccompanied. The first thing my wife did when she discovered how many tradesmen were expected ‘on site’ over almost ‘eight or nine’ weeks was to invest in industrial quantities of tea and coffee; secure a strong position in the world’s sugar markets and ensure a steady supply of chocolate biscuits. Early arrivals (usually bricklayers) have often been treated to toast and jam, or marmalade, before they crack on with what, for us, is a big job: the building of an extension on the site of an old conservatory.
We considered having the work done around 4-5 years ago, but decided to put it on hold due to a distinct lack of post-coronavirus tradesmen. That proved a costly error as the cost of almost every form of home improvement has since rocketed. By my calculations, dismantling a conservatory that had seen better days when we moved in and building a solid, brick extension in its place is costing us around 60% more than it would have in 2020-21.
‘Hard lines’, you might say; after all, everything has risen in price, not just brickies and chippies. It’s true and it makes me wonder where government statisticians get their latest annualised inflation figure of 3.8% from; I suspect a more accurate figure is at least twice this.
Nevertheless, there is one massive consolation of ‘having the builders in’. Despite acres of dust sheets, heavy duty drilling, mud and dirt everywhere, all set against a constant musical backdrop comprising primarily of hits from the Seventies and Eighties, courtesy of Smooth Radio (it could be much, much worse), we will ultimately recognise the benefits of this upheaval.
Twelve months from now, long after our extension is built and decorated and the guys are working on their next project, aided by copious quantities of tea and mountains of sugar, I imagine we will reflect upon the fact that we’re sitting in a more valuable property.
Adding an extension or new kitchen are two of the biggest home improvement jobs homeowners can commission. Sure, such projects only come to fruition thanks to large dollops of necessary upheaval (though the guys are not that bad), but it’s reasonable to assume that following completion of the building and internal work, our home’s market value will have risen by at least as much as the cost.
Granted, the original estimated cost tends to edge upwards, usually thanks to the discovery of something that requires attention, and which couldn’t have been foreseen at the outset, what Donald Rumsfeld would have called ‘known unknowns’ and they have to be tackled. And paid for, although this does not appear to be a major deterrent for most homeowners.
Research suggests that a large proportion of people who release the wealth stored in their homes invest it to enjoy retirement; others use the tax-free cash they receive to finally pay off their mortgage, usually of the interest-only variety.
According to figures recently published by the Equity Release Council (ERC), during the second quarter of 2025, homeowners aged 55 and over released £636 million in tax-free equity from their properties. The figure marks a 10% increase when compared with the same quarter in 2024 when £578 million of ‘hidden’ property wealth was released.
Much of this tax-free money will be used to supplement retirement income or to pay for a much-needed holiday, but the main reason why older homeowners release tax-free sums from their property is to invest in home improvements.
Many take the opportunity to upgrade their homes, with a new kitchen, conservatory, bathroom, extension or a host of other value-adding improvements as the prime motivation for releasing equity.
Ironically, by reinvesting tax-free funds back into their homes, for many the cost of releasing equity could be offset by the increased value of their home.
Indeed, by using an ERC-regulated equity release product known as a lifetime mortgage, there are millions of folks aged 55 and over who could release a proportion of the wealth wrapped up in their homes and utilise the tax-free proceeds to transform a house into a dream home.
The response of many people who have worked a lifetime to enjoy their retirement in style might be ‘And why not?’
Of course, homeowners are free to do whatever they want with their money – be it buying a new car, investing in a holiday home perhaps, or helping a family member get a foot on the property ladder. Importantly, with a lifetime mortgage homeowners are guaranteed to retain full ownership of their home for life.
They can also be assured that contractually, should they wish, they will never have to make any monthly payments. However, there is a new swing towards making payments. Lenders themselves have become more innovative in nature in recent years – maybe due to the reduction in equity release lending following the autumn budget of 2022.
Modern equity release plans in 2025 include names such as ‘Interest Reward’ and ‘Interest Select’. These plans are designed for homeowners looking to manage their future balance and ultimate inheritance by making some form of interest repayments back to the lender – almost a quasi-residential mortgage, but with greater flexibility.
Voluntary payments themselves can be ad-hoc, monthly, quarterly even annual based on personal preferences. The amounts paid can be anywhere usually up to 10% of the amount originally borrowed with no repayment penalties, providing choice dependent on budget. There is even a plan that allows you to repay in full at any time with no early redemption penalty in 2025.
It’s worth noting that a lifetime mortgage may reduce the ultimate value of your estate and could affect your entitlement to means-tested state benefits. However, the combination of tax-free cash, no repayments and guaranteed home ownership for life means that equity release could prove the answer to those wishing to join the 38% of folks who have released equity from their homes to improve and add value to them.
Clearly, freeing up tax-free funds to make home improvements consistently ranks as the main reason why people access the wealth built up in their homes, usually over several decades. In part, this is because home improvements are essentially an investment, a fact with which long-standing homeowners are familiar.
Our new extension should be ready by mid-October when summer really will be over. This year, however, we’re hoping to enjoy an autumn and winter free from icy draughts and cold floor tiles we inherited when buying our house. Which reminds me of a second major benefit of home improvements: in addition to an anticipated increase in our home’s value over the longer term, my wife and I, plus our extended family, get to enjoy it too.
