“If you are specifically looking to maximize your potential payday from an imminent sale, it’s really important to do plenty of research before committing and a good place to start is by looking at similar homes in your local area”
When it comes to maximizing the value of your home in current market conditions, not every renovation project will add as much value as you might think, particularly when balancing the value added against the cost of completing the work.
Barrows and Forrester have looked at 15 common value-adding renovation projects that homeowners could undertake and how much value each can be expected to add to today’s house price once costs have been considered.
The research shows that a property extension adds the most value, increasing the market price of the average home by 15%. Based on the current UK average house price of £294,329, this is an additional £44,149.
However, the average cost of adding an extension is estimated at £40,000. Once deducted from the £44,149 it’s thought to add to the value of your home, it leaves just £4,149 in actual added value.
So, when all is said and done, and the added value has been balanced against expenses, which home renovation projects are going to add the most real-world value to your home?
The answer is garage conversion which will cost you £13,750 to construct but will also add 10% to your home’s value in the process. That equates to £29,433 in the current market, which after accounting for costs, leaves an actual increase in value of £15,683.
A garden office is also a good option. At a cost of £9,500, it will add 7.5% (£22,075) in value which leaves an actual value added of £12,575.
On the other hand, homeowners who are interested in maximizing net profits might want to think twice before going ahead with landscaping, replacing their roofs, or replacing their boilers.
Landscaping costs a humble £3,750, but only adds 1.4% (£4,121) leaving you with an actual added value of just £371.
Meanwhile, a roof replacement results in an actual added value of £1,124, while a new boiler results in a net boost of £1,592.
However, sellers should still address these final projects if necessary because such issues can be big turn-offs for prospective buyers when viewing the home.
James Forrester, Managing Director of Barrows and Forrester, commented: “Home renovations aren’t always about adding market value to a property before selling, they’re often about adding to the enjoyment of living in our home. There is, therefore, no right or wrong project to get stuck into.
“But, if you are specifically looking to maximize your potential payday from an imminent sale, it’s really important to do plenty of research before committing and a good place to start is by looking at similar homes in your local area.
“First, what is their current market value? Just because national average house prices are cooling, it doesn’t mean your specific market is cooling.
“Once you’ve got a rough idea of how much your home is worth, it’s time to think how much more you would like to be able to secure for it by carrying our renovation works. You can then look for local properties that already boast the feature you’re considering adding, such as a conservatory or garden office. What is the value of that home compared to yours?
“From here, you need to shop around contractors and service providers to find the most reasonable prices and with all this information in hand, make your decision.
“The worst thing you can do is embark on a major project on a whim without thorough research or planning and chances are, it will leave you out of pocket.
“Of course, some areas of the home, such as the roof or boiler, may cost more to remedy than the value they add, but as they are integral aspects of a home, you may struggle to sell if they are not up to the job.”