Through the second half of 2020 and the first half of 2021, average property prices have been rising. Some indices, including Nationwide, are quoting double-digit increases, while others (e.g Hometrack) suggest a more muted rise of 5%.
It’s important to understand that a lot more-larger homes have been sold in the last year versus flats, which has, to some extent, inflated house price increases.
So, although prices are rising naturally for many properties in the current market, what can you do to increase a property’s value over and above whatever’s happening market-wise?
Increasing a property’s value through adding space
Typically, developments such as an extra bedroom, an ensuite and – especially in today’s environment - that much needed office space, will all add value. However, it’s not a given and you have to do some solid local research and work out the most cost-effective way to add space.
One of the most important things to understand when you’re looking at increasing a property’s value through extension, conversion or refurbishment, is that every home typically has a ‘ceiling’ price that it will sell for, so it’s important to ensure you don’t over-develop a property.
To help with this, it’s worth talking to an experienced and reputable local agent before you plan any renovations. We’re always happy to discuss any options you’re considering and can show you what kind of improvements have worked in the local area for different property types – and, just as importantly, what hasn’t!
How to add space cost effectively
As a general rule, the easiest and cheapest way to add space is by keeping any extension to ground-floor level and at a size that doesn’t require planning permission. For example, you could convert a garage or an outbuilding, or extend the existing downstairs footprint.
Converting a loft, digging down into the basement or building a two-storey extension can all be great ways to add space to your existing home, but they are often quite costly and it can take some time to get your money back through an increase in the property’s value.
An alternative way to add value, provided you have enough garden space, is to put an extra building outside. You can add a bespoke build or go for a pre-fab unit that can be delivered, fitted and ready to use within just two or three weeks. That could be an office, bedroom, gym or any other additional space to suit your needs.
Many garden-builds won’t need any planning permission, but it does depend on things like the size of your garden, whether your property is in a conservation area, and the requirements of your own particular local council. So, always check what you can and can’t do with your Local Authority before moving ahead with your plans, and ensure any conclusions are put in writing.
Average costs of adding an extension to your home
Costs can vary widely, depending on your property, location, size of the extension or conversion and the finish, but here are some guides:
- Garage conversions can cost from £5,000 to £20,000
- A single-storey extension will typically cost from £15,000 to £35,000
- A two-storey extension is likely to be from £40,000 to over £100,000
- Loft conversions for a basic room would be from £15,000 (not legally habitable space) through to £70,000 or more
- A basement conversion could cost from £30,000 to £100,000 or more.
Source: https://householdquotes.co.uk/cost-of-extension/ and https://www.myjobquote.co.uk/costs/garage-conversion-cost
Do extensions add value to property?
This is a really tough one to answer, as it very much depends on local supply and demand. For example, if there are lots of two-bed terraced homes in the area and you develop a three-bed so that it becomes a four-bed, the property value could rocket. However, if there are already lots of four and five beds and only a few two or three beds, you might not get your money back.
So it’s wise to speak to one of our local experts about your plans and we can find some similar properties near to you that will help explain what the uplift in value for your property is likely to be.
In the meantime, here’s some research to suggest how much additional value you could generate by increasing the usable space in your home:
A recent survey by Shawbrook Bank suggested that extra space in the home could add around £14,385 to a property’s value. They also suggest converting loft space or adding an annexe could increase the value by 5%, while creating a bigger kitchen might improve the value by 4%, as long as it’s line with what your buyers are looking for. Remember, some may prefer to put their own kitchen in!
Other surveys, including one from Nationwide, suggest adding a good-sized bedroom and en-suite could put more than 20% on the value of some homes, but conservatories and loft extensions can struggle to secure payback.
Sources: https://www.propertyreporter.co.uk/at-home/e-home-improvements-which-add-the-most-and-least-value-to-your-home.html and https://www.uswitch.com/loans/guides/home-improvements-that-can-add-value-to-your-home/
Apart from adding space, here are some other ways to add value to your home:
Having an eco-friendly home means a lot to some buyers and there is increasing evidence that the more energy efficient a property is, the more buyers will pay. This is likely to become ever-more the case as the government drives towards its ‘net zero’ targets. Private landlords already have to secure a minimum EPC rating of E in order to let a property, and there are proposals to raise this to a minimum C rating in the not-too-distant future.
Some of the more common energy efficiency measures, such as installing insulation and fitting double glazing (if allowed), do make sense and can be very cost effective, with the added bonus of saving the homeowner potentially hundreds of pounds a year on utility bills.
And, with an aging population, making sure a property can meet the needs of someone in a wheelchair could help enhance the value of your home when marketing.
Upgrading kitchens and bathrooms
Typically buyers want one of two things: either a home they can move straight into, very much as a developer would present a show home, or a run-down property they can put their own stamp on - a ‘wreck’ they can turn into their dream home.
So, if you’re considering a kitchen and/or bathroom upgrade, it’s worth really thinking about whether it would add value – or whether it could even detract from doing so. A great design and high-quality fittings can easily cost tens of thousands of pounds and you can’t simply add what you’ve spent onto the price of your home.
Typically, room renovations add value when they’re bringing the whole property up to the same standard. Remember, you want to appeal to either someone who wants to make changes or someone who wants a show home, so if you’re looking to sell at the maximum possible price, aim to get the whole property to the same specification.
Presenting a home for sale
If you don’t have a huge appetite for making major changes, a relatively quick and easy way of boosting your home’s value and appeal is to give it a good lick of paint, a tidy up and then present it in such a way that potential buyers can see themselves living there.
Just wiping down marked walls and skirting boards, spending a few hundred pounds on a quality paint job and replacing a frayed carpet with a new, neutral coloured one can make a property look fresh and easy to move into.
If you have a flare for interior design, check out the latest trends. A few well-placed throws, cushions, lamps and an interesting painting or piece of art can transform the look of a room and really make a difference to a property’s appeal.
And a simple rule for helping buyers see the value in your home is to make sure every room delivers as promised. For example, if a room is described as a double bedroom, does it actually have a double bed in it? If it’s ‘Bedroom 3’, is there a bed, or are you just using it as a storage room? Has the ‘dining conservatory’ got a table and chairs in it, or does it look more like a temporary office or play area for the kids? Staging rooms so they have a clear purpose can help you achieve a better price, for little or no financial outlay.
Whatever plans you have for selling your home or renovating for profit, our local property experts will be able to help explain exactly what buyers in your area and price bracket are looking for. Just get in touch with your local branch and we’ll be happy to help you work out the best way to add value to your home.