Can't sell? Make the most of what you've got
A stagnant housing market means more people are doing home improvements. But which ones add value? Chiara Cavaglieri investigates
Sunday 24 May 2009
Tantalising rumours of a recovery in the housing market have circulated in recent months, but a convincing upward shift has yet to materialise. A quarter of British homeowners are now planning to build themselves out of trouble, according to financial advice website Unbiased.co.uk. But what changes will add value to your property?
Any changes should be about adding lifestyle value. "Looking at the immediate value of a property can be misleading unless you are a developer or want to sell your property in the short term," says Hugo Tugman, founder of Architect Your Home. "If you are planning to stay in your home for the medium to longer term and your quality of life would be much improved by having an additional bedroom for your growing family, for example, it is important to look at that bigger picture, especially if there is limited opportunity to move house."
However, if your plan is to "improve to move", any changes must be thought of as an investment and personal taste should be set aside to maximise the chance of appealing to a wide range of buyers. Homeowners should also steer clear of anything that could be considered high maintenance. Saunas and swimming pools are very unlikely to add value and the running costs may even put off potential buyers.
The average price of properties in the local area will have a sizeable impact on the maximum price achievable, whether successful improvements are made or not. Researching the selling price of similar properties nearby will give you a good idea of the maximum price your property is likely to achieve, Mr Tugman suggests.
Any long-term improvements should focus on creating more space. "If you do need to add space, the next best option is to extend upwards – converting a loft is one of the most cost-effective ways to add space," says Mr Tugman. "The next option is to extend outwards with a single or double-storey extension." Once you have exhausted these possibilities, he suggests expanding downwards, with a basement conversion, although this is generally the most expensive way to add space.
For more extensive improvements, the difficulty lies in trying to add more value to your property than you paid out – a tall order in a subdued market. Extensive upgrade work is unlikely to add to your sale price if you're looking for an imminent move.
If your plans are longer-term, loft conversions can add both space and value, but homeowners must check with the planning office before making a start. They will also have to get building regulations approval and conform to fire regulations and there is no guarantee that owners will recoup all of their costs. A recent survey of property valuation experts by HSBC found that some of the more traditional home improvements fail to affect the property's value at all. Recarpeting came in top of the list, followed by redecorating, with about half the polled experts saying they made no difference to the overall price of the property.
Instead, valuation experts stressed the importance of simple, but effective ways to create additional space.
Decluttering was considered to be the best way to increase a property's chance of selling at a good price, with 61 per cent of the valuation experts making it their top choice. Simple, inexpensive measures such as reorganising the layout of existing rooms and adding extra storage will appeal to buyers. The research also highlighted the importance of keeping the garden in shape.
The message seems clear: home improvements don't have to be expensive to add value to your property. In fact, some small, relatively inexpensive changes can offer better returns than more ambitious projects. Basic improvement work such as replacing old countertops, repairing broken fixtures and other minor repairs will make a difference. "Kitchens and bathrooms are good rooms to spend a little money on, but don't go mad and spend thousands on fixtures and fittings," says Martin Roberts, property expert from website Makingmoneyfromproperty.tv. There is no need to rip out old fittings and fork out for new units, he suggests.
Instead, simply replacing doors and work surfaces is an inexpensive way to update an old kitchen or bathroom and a lick of paint will freshen up tired walls. As labour is usually the most expensive part of any renovation project, taking on some of the work yourself would reduce costs.
Installing double glazing and other energy-efficient forms of insulation is another way to entice prospective buyers. Many people will be on the lookout for homes that are cheaper to run. There are even energy grants up for grabs for loft and cavity wall insulation, which together could save about £365 per year, according to the Energy Saving Trust.
Elsewhere, any changes that reduce space should be avoided. Resist the temptation to knock through walls upstairs, as reducing the number of bedrooms often has a direct impact on the value of a property. Equally, turning a garage into a workshop can have a negative impact if it compromises the parking facility.
As for financing home improvements, there are several options but the starting point should be your existing mortgage lender. "There's no great appetite among lenders to accommodate added borrowing although your existing mortgage provider may be slightly more receptive to such requests," says Mr Roberts.
"Remortgaging elsewhere is potentially another option," says David Black, principal consultant from financial research company Defaqto. "Or a second charge secured loan may be worth exploring if that doesn't work." However, for smaller borrowing amounts it may be cheaper to use a credit card. The Barclaycard Simplicity Visa charges a typical APR of 6.8 per cent and Marks & Spencer's Money MasterCard, offers 0 per cent on purchases for 10 months.
It is also vital that homeowners planning to make substantial improvements contact their home and buildings insurance provider to check that they are covered by the policy if there are any DIY disasters. There may be a need to amend the level of cover temporarily and the policy may become void if the insurers are not informed that work is being carried out.
- 1 The ‘Beverly Hills’ of Surrey pays more income tax than big cities of the North
- 2 Tottenham to smash pay scale with £150,000-a-week contract in attempt to tie Gareth Bale to club
- 3 'Revenge porn' is no longer a niche activity which victimises only celebrities - the law must intervene
- 4 The moral case on tax avoidance is overwhelming - and we all know Google wants to do the right thing
- 5 Sam Wallace: The second coming of Jose Mourinho at Chelsea will be a reunion that can only end in tears
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£500 per day: Orgtel: A top tier banking client urgently requires Finance Busi...
£425 - £550 per day: Orgtel: Senior Finance Project Manager - £550 - Bristol -...
£150 - £250 per day: Orgtel: KYC Analyst - London - Banking - £150-250/day C...
£500 per day: Orgtel: A top tier banking client urgently requires Finance Gove...
Day In a Page
A modern home of almost 1,000sq ft is close to Stoke Newington's high street. £499,950
A five-bedroom bungalow in Hoveton with riverside garden and mooring dock, £550,000
A refurbished one-bedroom flat with south-facing reception and high ceilings. £579,950
A four-bedroom Grade II-listed house in Nazeing with large gardens. £550,000
A modern four-bedroom house in a converted stable within walking distance to Peckham Rye. £695,000
Three-bedroom house in a quiet residential area within close distance to Battersea Park. £450,000
A three-bedroom cottage within commuting distance of London, Norwich and Cambridge. £250,000
A two-bedroom cottage with a sun room and gardens in South Chard. £350,000.
A three-bedroom semi-detached house with original features including fireplaces and wooden flooring. £399,950
A modern two-bedroom flat split across two floors and close to several public transport links. £595,000
A one-bedroom flat with an open-plan reception/kitchen and private balcony. £315,000.
A bright two-bedroom garden flat between South Acton and Chiswick Park. £499,950.
A listed four-bedroom farmhouse with stables, set in four acres. £500,000.
A three-storey family home with four bedrooms and an extended kitchen/diner. £995,000.
A three-bedroom Hamstone cottage in the rolling Somerset countryside. £430,000.
A luxury one-bedroom apartment on the first floor of a converted Victorian house. £425,000.