Home improvements can add as much as £40,000 to the value of UK homes, according to new research.
Over the past five years, UK homeowners have spent £295 billion renovating their homes, with new kitchens, walk-in wardrobes and garden landscaping offering the biggest return on investment.
Analysis of property listings by Post Office Money found that homes with such improvements were on the market for more than 10 per cent higher than the average asking price.
The research also questioned over 2,000 homeowners with those who made changes to their property estimating that the upgrades increased the value of their property by £40,000, from an average of £210,000 to £250,000.
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The average spend on home improvements was £14,015.
In 2018, the cost of moving in London for first-time buyers was £7,678, more than four times the national average, according to Compare My Move. Stamp duty adds an additional two to 12 per cent of a property value on to costs, and there’s conveyancing fees, survey costs, estate agent fees and removal fees.
As a result, it’s little surprise that many homeowners are opting to stay put and improve their current home, rather than upgrade by moving.
Only five per cent of those surveyed made improvements to their home with the specific intention of moving.
One in four people (28 per cent) polled did so because they thought it would be a good investment and would increase the value of their property, while the majority of those questioned (59 per cent) said that their reason for upgrading their home was simply to improve its appearance.
Chrysanthy Pispinis of Post Office Money said: “Over the past few years, house price growth has slowed, so homeowners have turned to other options to add value to their homes – with renovations being a clear opportunity.
“Making the right changes to your home can increase its market value significantly; if improving your home’s asking price is your priority, it’s important to keep in mind the cost of the improvement and the value it could add.”
There’s no guarantee that home improvements will increase the value of your property, however, so it’s it worth exercising caution before splashing out on big spends.
“If you are in a terraced house with no off-street parking, a loft extension to get more bedrooms may not attract the higher price of a similarly sized detached/semi-detached property that has off street parking and a garage,” said Nick Morrey, of the mortgage advisors John Charcol.
“This is especially true if you are taking a three-bed terraced property to a four-bed since the type of buyers who want/need a four bed property probably need space for cars, meaning your road of terraced houses is probably not going to feature on their radar.”
Luxury items also may not float everyone’s boat, Morrey warns. “Gold plated taps in bathrooms might work for some people, but most people will not pay extra for them – same with high end hi-fi audio systems – and in an uncertain market, de-cluttering/sprucing decor up might have a bigger impact.
“People also spend much of their waking hours in kitchens, dining rooms and living rooms/play rooms.
“So, adding extra bedrooms may not be as ‘profitable’ as the cost of a two story extension, but adding to the ground floor to create space with an open area or a utility room or an office/study might be,” he said.
Insecurity around Brexit has resulted in the number of potential buyers dropping. While political instability may affect the housing market for some time, Morrey added that a good kitchen or bathroom is most likely to be top of most purchaser’s lists.
Five money-saving tips for home renovations
Make a big impression without breaking the bank (Shutterstock/Pixel-Shot)
Shutterstock / Pixel-Shot
Create a budget – and stick to it
Before you start splashing the cash, sit down and do the sums so you can accurately assess what’s reasonable and what’s out of reach – and stick to it. Going over budget is common when making home improvements, so factor in an additional 10 per cent for unexpected costs.
While some tasks should be left to the professionals, there are some tasks that can be attempted at home with a little know-how. Basic painting or grouting can be undertaken with the right knowledge – although it’s worth bearing in mind that you may have to fork out for correctional work if you get it wrong. Before you begin work, make sure you have the correct tools and equipment.
Before making big purchases, such as kitchens or bathroom items, hold on for the sales, where there are some excellent savings to be found. As well at the post-Christmas sales and Black Friday, there are increasingly more deals to be found throughout the year.
While it’s easy to get carried away making grand plans for your home, it’s important to be realistic. If you have a limited budget, prioritise what’s most important for you and take small steps to upgrade your living space. Don’t lose heart if things aren’t moving as fast you might like – it’s something else to work and save towards.
Know when to spend and when to save
It can be tempting to opt for the cheapest model or product on the market, but be aware that buying cheap can often mean buying twice. Read product reviews and do your research to find out what other consumers think about their purchase before splashing out. It’s also worth establishing what you’re prepared to scrimp on – and what you’re not – before you start buying.
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