The Cost of Adding Value to your Home

THE COST OF ADDING VALUE TO YOUR HOME A TOUGH CLIMATE FOR HOMEOWNERS House prices have declined in recent years - Average UK House Price Adjusted for Inflation £218,500 £250,000 £163,000 £200,000 £150,000 £100,000 £50,000 03 2002 2003 2004 2005 Q1 Q1 2012 Q1 2006 2007 2008 2009 Q1 2010 Q1 2011 Q1 Q1 Q1 Q1 Q1 Q1 With house prices falling in many areas of the country, increasing numbers of homeowners are choosing to improve rather than move. The main advantage of doing this is that when the market does pick up, your property will be worth more and, while you wait, you can enjoy the benefits of an improved home. HOW MUCH IMPROVEMENTS COST AND THE VALUE THEY ADD* *Percentages are potential value increase Loft conversion - 15% 32% - Extra bedroom Approximate Cost £17,000 - £32,000 Approximate Cost £30,000 - £40,000 Building Extension - 25% 2% Redecorate Approximate Cost Approximate Cost £17,000 - £50,000 From £1,000 En suite bathroom - 12% 1% New windows Approximate Cost Approximate Cost From £350 £8,000 - £10,000 per window 15% Conservatory Kitchen Extension - 18% Approximate Cost £10,000 - £70,000 O...------- Approximate Cost £20,000 - £50,000 1% Re-Carpet Resurface drive 1% Approximate Cost Approximate Cost £10 - £60 From £12 per per square square metre 15% Basement conversion Approximate Cost £18,000 - £35,000 Before committing to home improvements it is crucial to get an idea of the local housing market, as this will have a bearing on how much actual value any changes will add. For example, while a room extension will add £52,813 on average to a property's value in London, it will add only £10,000 in the North West. HOME IMPROVEMENT ON A BIG BUDGET. Big-budget improvements are rarely good value for money, but really make your home stand out from the competition. Here, we look at the potential costs involved in various home improvements and what sort of increase in value you might expect once they are completed. Actual costs/increases in value will depend on your property and individual circumstances. Average Increase in Value Minimum Cost Converting loft space £17,000 Can increase your floor space by up to 30% £16,152 Return on Investment You may require planning permission and an architect which can add substantially -5% to your costs. Average Increase in Value Minimum Cost Conservatories £10,000 £9,240 Extra living space that will entice potential buyers. Return on Investment Reduces the size of your garden. -8% Improvements like these are expensive, so they are best paid for with savings, or by re-mortgaging or taking out a low cost loan. HOME IMPROVEMENT ON A „MODEST BUDGET, Re-carpeting Average Increase in Value Minimum Cost £750 Cheap and makes an instant impact on potential buyers. £1,738 Much more profitable if you are prepared to install the new carpet yourself. Return on Investment 132% Average Increase in Value Minimum Cost Resurfacing £1,383 Can add a great deal to the curb appeal of £2,679 your home. Will require a contractor unless you are a Return on Investment skilled landscape gardener. 94% Improvements like this don't require a huge investment, so ideally should be covered by savings or a 0% credit card, but make sure you are able to pay off what you owe during the interest-free period. BANK NAME 1234 5618 9012 345b CANDHOLDER NAME BEST-VALUE • HOME IMPROVEMENTS En suite bathroom Average Increase in Value Minimum Cost £8,000 £20,000 Return on Investment 150% Redecorating Average Increase in Value Minimum Cost £1,000 £3,100 Return on Investment 210% Sources Tips and Advice - www.servicemagic.co.uk Which Home Improvements Add Value? - www.channel4.com/4homes How Much Do Extensions Cost? - www.channel4.com/4homes House Price Index - www.nationwide.co.uk How to add real value to your home - www.independent.co.uk DIY fanatics warned as home improvement return on investment falls -www.newsroom.hsbc.co.uk UK house prices: July to September 2012 - news.bbc.co.uk Six tips to boost the value of your home - www.moneywise.co.uk Floor space: Will British rooms get bigger? - www.independent.co.uk TM MoneySupermarket com EI