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New analysis has revealed how a certain type of renovation in your home can increase its value by almost 25 per cent.
A recent survey indicated that kitchen and bathroom renovations were the most popular amongst homeowners who have made improvements to their properties in the past five years.
However, an extension or loft conversion could add as much as 24 per cent to the value of a typical home, analysis by Nationwide Building Society suggests.
An extra bedroom can potentially add 13 per cent to a typical property’s value while an extra bathroom may add 4 per cent, the research indicates.
The society calculated that a 10 per cent increase in the floor area of a typical home could potentially add 5 per cent to its value.
Individual circumstances will vary and factors, such as the location of a home, wider housing market trends and the extra floor space gained by any extensions, will have a bearing on the value of a property.
Homeowners would also need to weigh up the cost of any renovation when considering how much value it may add.
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Across all homeowners who had made renovations in the last five years, the average spend was around £52,000, rising to £97,000 among homeowners aged 25 to 34 – likely reflecting more substantial upgrades having been undertaken by the younger age group.
Andrew Harvey, Nationwide’s senior economist, said: “We’ve used our house price data to look at the factors that affect the values of homes as well as the potential to add value.
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“While we can’t identify the value associated with kitchen and bathroom renovations, we are able to explore the impact of more substantial projects, particularly those which increase the size of the property.
“Location remains key to house values but other factors, such as the number of bedrooms, are also important to home buyers. Home improvements that increase the size of the property, such as an extension or loft conversion, remain a compelling way to add value.”
He added: “Homeowners that add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24 per cent to the value of a three-bedroom, one-bathroom house.
“Our analysis suggests that, providing the room is useable, this can be a good way to increase the value of a property.”
The survey found that, among homeowners who have undertaken renovations in recent years, around a third (34 per cent) made green improvements, with more than half (56 per cent) in this group adding solar panels.
Mr Harvey added: “Younger homeowners appear to be most interested in greening their homes, with over two-thirds (69 per cent) of those aged 25 to 34 who had renovated in the last five years making green improvements.
“Older homeowners (aged 55 or above) were least likely to have made green improvements (at 18 per cent), with bathroom renovation being the most popular amongst this demographic (68 per cent of those who had made improvements opted for this).
“Looking at other popular home improvements, 39 per cent of homeowners who had renovated added an outbuilding, such as a shed or entertainment space, while 23 per cent added a conservatory to their property. In terms of larger scale projects, 24 per cent of those who had made improvements opted for a loft conversion, while 21 per cent had a single-storey extension built.
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“The most popular reason for renovating was to make the property look nicer (54 per cent cited this as a reason) while 35 per cent were looking to boost the value of their property, with the latter being the most important factor for younger homeowners.
“Thirty two per cent of those surveyed made improvements to modernise the property to make it habitable, while 26 per cent were looking to add more space. Interestingly, just 7 per cent were renovating in preparation for a sale.”
The survey also indicated most homeowners are pleased with the results, with just 4 per cent regretting renovating their home.
The most common reasons given by homeowners for not being satisfied with work undertaken were costs being too high and the results not being what homeowners wanted.
The survey was carried out by Censuswide among 2,000 homeowners in October.
Mary-Lou Press, president of NAEA (National Association of Estate Agents) Propertymark, said homeowners need to consider regulations relating to loft conversions.
She added: “Additional considerations to be aware of also include if your property is listed or sits within a potential conservation area, so it is always vital to fully check with relevant planning departments before undertaking any alterations.”
