Get the measure of your new extension or you'll be waiting a long time for a buyer
Home improvements can give sellers the edge in today's tough market. But only if they're well thought out, writes Laura Howard
Sunday 25 November 2007
Homeowners still banking on the value of their house rising next year look like having their hopes dashed. Nationwide building society's 2008 forecast is for a fall in the annual rate of house price inflation from around 10 per cent to 0 per cent by this time next year. This means that, in real terms, property prices will also be falling as they will not keep up with inflation (currently 4.2 per cent, based on the retail price index).
An economic slowdown, tighter controls on mortgage lending and affordability problems for first-time buyers have combined to give the property market all the vibrancy of tumbleweed. Figures from the National Association of Estate Agents (NAEA) show that in October 2004, agents had an average of 511 buyers registered on their books. Last month they had just 282.
Peter Bolton-King, chief executive of the NAEA, says that agents are braced for stagnation, at best, over the next year. "Basically the market will be stripped back down to basic supply and demand," he says. "This means that flats, of which there's an oversupply in some areas, may fall in value but a village or a family home in the right area will rise."
The upshot is that homeowners can no longer sit back, do nothing and assume their bricks and mortar will climb in value.
"People have short-term memories," says Dean San- derson, managing director of Sanderson James estate agents in Manchester. "Because they have seen the value of their home increase [dramatically] for the last seven or eight years, they start to panic if prices aren't rising at the same rate – but price rises like this are over."
One way to break the shackles of a stagnant housing market and make your property more marketable is to carry out major building work. The recently published Halifax Home Improvement Survey shows that 58 per cent of homeowners have undertaken some form of work in the past 12 months – an increase of 12 per cent on last year's figures, when prices were still climbing. One in four homeowners in this group said they had work carried out specifically to add value to their home – an increase from just 7 per cent on the previous year.
A new kitchen was the improvement thought most likely to add value, followed by an extension, loft conversion and conservatory.
But, according to Mr Sanderson, home improvements can be a dangerous gamble. "You may not add as much value as you spend," he explains. "Even if you do, this value is only realised if you trade down or sell up and rent. [And if you are paying for the work with] borrowed money, that cash will have to be paid back – with interest."
Be warned, too, if you're tempted to get the "man down the road" to carry out major work. This can prove a false economy – as well as reducing the saleability of your home, warns Mr Sanderson. "Estate agents are bound by different rules than they were 10 years ago. With a loft conversion, for example, if a homeowner does not comply with legislation such as building regulations and planning permission, we will just have to call it a 'boarded loft' – not even storage space, as it won't be weight-bearing. Clearly, if people have spent £8,000 to £9,000 having it built, this is frustrating."
Sometimes, improvements can simply be ill thought out. Don't have a big conservatory built in a small garden that is not even facing the sun, says Mr Sanderson. You would do better in terms of the resale value to create an extra room elsewhere in the property.
And homeowners that take improvements literally into their own hands can actually reduce the value of the house. A DIY "arch", for example, in place of a wall between a kitchen and dining room, can knock off thousands if there is no proof it is structurally supported.
Some people go further still, says Mr Sanderson. "We once valued a property in which, in building their own loft conversion, the owners had removed the lateral restraints in the roof and put plasterboard there instead. Not only was the house unsaleable but the fire brigade had to be called in case the whole thing started to fall down."
But where home improvements are carried out by professionals, are proportionate to the property and surrounding area, and carry the necessary planning permission and paperwork, they can save money and stress, says Mr Fincham. "It's not just adding value that motivates people but creating space for the family – whether it's a new baby, a child returning from university who can't afford to buy, or elderly parents. After all, a home is something that we live in."
If you want to sell your home and are not planning major improvements, you will still need to pay extra attention to presentation in the current tighter market. "There is a lot more competition now to sell the same house, so buyers will have to put some work in," says Mr Bolton-King from the NAEA. "It's back to kerb appeal, which means a tidy garden and painted front door – and decluttering on the inside, showing as much floor space as possible."
Six to view in Scotland
Four-bed, architect-designed home in picturesque location; landscaped gardens
Six-bed detached house; garage, outbuildings and large garden
Four-bed villa; hi-tech alarm system and gardens to front and rear
Lanark, South Lanarkshire
Spacious four-bed home; own garage. Set in gardens with stunning views
Airth, near Falkirk
Four-bed detached home; conservatory, garage and gardens to front and rear
Five-bed home with exposed stone walls, double garage and extensive gardens
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Mark Dampier: How to get an income now that savings are past the 'use by' date
Thousands of UK investors could lose out following collapse of Secured Energy Bonds
Bargain Hunter: Fly off for a winter break in France or Portugal for well under £100
Millions in line for compensation after being sold unnecessary credit card cover
Weekly Money: Round-up of the personal finance stories you may have missed 26-30 January
- 1 Three-year-old boy shoots pregnant mother and father in New Mexico
- 2 Stephen Fry explains what he would say if he was 'confronted by God'
- 3 Jewish community urged to boycott Cornwall village after residents vote for 'Hitlers Walk' sign to be reinstated
- 4 Benedict Cumberbatch's Alan Turing gay-rights campaign snubbed by Prince William and Kate Middleton
- 5 Kim Sears responds to swearing controversy with 'parental advisory' T-shirt at Andy Murray's Australian Open final
Stephen Fry explains what he would say if he was 'confronted by God'
The open loathing between Barack Obama and Benjamin Netanyahu just got worse
9 reasons Greece's experiment with the radical left is doomed to failure
President Putin is a dangerous psychopath - reason is not going to work with him
Have we reached 'peak food'? Shortages loom as global production rates slow
Britain's widening poverty gap should be causing outrage at the start of the election campaign
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion