Buying a property isn’t just about moving into a new home, it’s also an investment.
The value of your property will affect how easily you will be able to afford your next purchase and how large a deposit you can put down. Even if you’re planning on staying in your home for good, it’s in your interest to increase your property value, as that value can be accessed as equity later on. Therefore, it makes sense for homeowners to want to add value to their property. Usually, this involves making your property a more appealing place to live, so it works out as a double win: your home is made more comfortable for you and you’ve increased your equity. So it’s a sure thing, right?
Of course not – you have to make sure what you’re doing is reliably going to be worth the investment you put into it. To help you out, we at Coreco are offering up our top tips for adding value to your property. These tips are focused on the housing interior since we already have a blog about growing value with your garden, which you should totally check out.
For many estate agents, adding a bedroom is the best way to increase your home’s value. One of the first units of measurement you get for a property is the number of bedrooms, and the buyers will expect to pay more for multiple bedrooms. For an example, a semi-detached two-bedroom property can have its value increased by 13% if it’s made into a three-bedroom property.
You’ll also attract a whole other area of the market that previously wouldn’t have considered your property due to the lack of bedrooms. So it’s worth looking for areas of the house you can convert into one. Lofts are popular for this; if you turn a loft into a bedroom (with en-suite) you could increase the value of your property by 20-22%.
Unlike bedrooms, having a second kitchen doesn’t necessarily open your property to a new area of the market. However, a new kitchen will add plenty of value to your property and a well-designed one will make your property more attractive to buyers. While the average property value increase from a new kitchen is a little low – about 5-6% with an average cost of £8,000 to renovate – the importance of the kitchen is very high on buyers’ minds.
Many of those looking to purchase expect to redo the kitchen when they move in, so having a new, attractive kitchen full of appliances and design ingenuity can make buyers flock to your property.
Having more bathrooms has become ‘on trend’ in recent years, with particular emphasis on en-suite bathrooms. Bathroom suites can be bought for as little as a £1000. Add on to that the construction requirements and the fact that you’ll need to sacrifice a chunk of a bedroom to fit it in, and you should be able to calculate the overall cost (usually between £2,500 and £6,000). Buyers have an expectation of at least one bathroom to every three bedrooms, with an en-suite in the master bedroom. This should be your minimum.
If you decide to go through with another bathroom, it could increase the value of your house by 6%.
Don’t put too much focus into the major renovations of your property until you’ve shown some love to your minor problems. Peeling paint, squeaking hinges, mould, dripping taps, loose tiles and all general imperfections won’t individually make any drastic changes to your property value, but the cumulative effect can cause a more dramatic price drop. Moreover, people who visit your property simply won’t be interested.
With a lack of demand for your property, you will be much less likely to sell at your target price. More likely, you’ll go much lower as buyers take advantage of your position. Therefore, keeping the house up to scratch – even in the superficial – is definitely worth the investment.
Our final piece of advice is to thoroughly investigate how wise it is to embark on the work in your house. You might have noticed that a few of the above ideas require quite an investment, in both energy and finances. Both these factors should be taken into consideration before deciding to undertake any improvements. First of all, consider how your household will manage during more invasive refurbishment: redoing a bathroom can be especially difficult if you don’t have a second one. This factor will vary for everyone’s personal circumstances, so give it some thought!
The financial side has more long-term ramifications, however. This will affect your next purchase and your ability to take loans out on your equity. You can usually estimate how much value would be added to your property. You can get estimations of the work from builders and compare that to the expected value increase. For instance, the average cost of converting a loft in the UK is around £30,000-£40,000, but even if your property increases in value by 20%, a property valued at £125,000 would likely only increase in value by around £25,000, losing you money.
People often assume that the valuation of a property is the most important reason to spruce up the pad, but you also need to make sure your property is attractive to buyers (if you’re planning to sell) because buyers will always take superficial factors into consideration. There are many other factors to consider when trying to increase the value of your house, of course. Is your property leaking anywhere? Is the structure up to mark? Does it have central heating? Feel free to get in touch with Coreco if you have any questions about housing value or mortgages! We’re happy to help.