Moving home can be complicated due to all the moving parts, from those first tentative glances in estate agents' windows, up to that moment six months after you get the keys and you finally unpack the last box…the whole process is fraught with potential anxiety. Add to that the fact that the average cost of moving house currently stands at almost £9,000 and it's clear why many families are finding it makes sense for their sanity as well as their finances to stay put and improve, rather than move.
With all home improvements, planning is key, as one in four projects ends up going over budget. We’ve all seen those TV home improvement shows where the hapless homeowner ends up bemoaning their overspend – so it’s worth doing a little extra planning work upfront to avoid this.
Beware of the 'ceiling price'
Before you spend large sums on adapting your home to suit your current needs, it’s wise to make the changes having carefully considered your chances of recouping the value of your improvements in your home’s potential future sale price. Every home has a ‘ceiling price’ – the maximum price you can expect to achieve based on similar properties in your area. Even if you turn your terraced house into Buckingham Palace, there’s a limit to how much people will pay for it. It can be worth talking the options through with an estate agent to understand your home’s particular threshold. If you live in a house worth £250,000 and spend £25,000 on a new kitchen you may not be able to recoup the full value when you sell up if you’re already near the ceiling.
If you use savings to fund the improvements you could find that the increase in value you achieve could be more than the interest you would have earned in a savings account, particularly while interest rates are low. If you don’t have savings you could consider taking out a loan – or, for bigger improvements, increasing your mortgage borrowing with your current lender or re-mortgaging your property to a new lender will free up some equity. Before you consider these steps, you will need to check whether you can afford the monthly payments and whether an early repayment charge would be imposed by your existing lender.
Things to bear in mind
The suggestions below will potentially add value to your home if carried out well. Bear in mind though that the costs and potential impact on your home’s sale value indicated here are only intended as guides – the actual figures could vary significantly. And of course, for any home improvements you should take necessary precautions to help ensure the work is completed to satisfactory quality and to time and budget:
- Take the time to plan exactly what you want to achieve – consulting structural engineers and architects if necessary, and obtaining a minimum of three quotes from builders.
- Agree the cost beforehand – set aside a strict budget but allow a contingency in case of overspend.
- Agree on a realistic time frame upfront, but remember there may be unavoidable delays, caused by bad weather for example.
- Keep up regular communication with the builders.
- Have a contract in place to cover both parties and never hand over payment upfront.
- Check your builder has the right insurance in place before any work begins.
1. Convert your garage
If you have off-road parking and depending on where you live, you may find converting a garage can significantly increase your home's value – by as much as between 10 and 15 percent.
If your garage is attached to your house, you should be able to convert it into another room for between £10,000 and £20,000 – but if that doesn't suit your home or your needs, you could turn it into a playroom, a home office or a gym.
2. Knock down walls
If you have lots of smaller reception rooms divided by walls that aren't load-bearing, knocking one or more of them through could transform the 'flow' of your living space at a relatively low cost. Nowadays most people's lifestyles suit a large kitchen/diner better than a smaller kitchen and separate dining room. Equally, if you have two small living rooms, knocking them together could create a more attractive space. These changes are likely to appeal to potential buyers too, so you could be adding value to your home. It's difficult to calculate the potential increase in value this may bring to your home, but the cost is minimal compared to many other home improvements: knocking down a load-bearing wall costs around £1,500.
3. Update your kitchen
The popularity of open-plan kitchen and dining spaces means kitchens are increasingly the focal point of a home, providing everything from the dinner table to the place where kids do their homework. A basic makeover, focusing on changing fixtures and fittings such as door and drawer handles and adding energy-efficient appliances, can make a surprising difference at minimal cost.
If you're wanting to fit a completely new kitchen, including appliances, research shows you can expect to pay around £6,000 and in doing so could add around 3 to 10 percent to the value of your home.
4. Convert your loft
If the only way is up, extending skywards is one of the easiest ways to gain an extra bedroom and bathroom. The most successful loft conversions are those that appear to be an integral part of the existing property, both inside and out, and in which the home retains a balanced ratio of living space to sleeping space. You'll need to ensure the pitch of your roof is steep enough to allow the necessary headroom, and remember that you will have to sacrifice space on the floor below in order to install access. You'll need to consult a structural engineer to make sure your floor joists can support the extra weight. You may also want to hire an architect to bring your ideas to life and act as an agent to guide you through the required planning permissions and building regulations. If certain conditions are met, you may not need planning permission.
A basic loft conversion costs around £20,000-£30,000 and can add up to 20 percent to your property's market value.
5. Add another bathroom
Adding an extra bathroom, or an en suite, can make life with a growing family easier in the mornings (no more queues of grumpy, sleepy people in pyjamas), as well as being a selling point in the future. Bear in mind, though, that if you are converting an existing bedroom into a bathroom it could end up devaluing your home. In a street made up of three-bedroom properties, downsizing to two bedrooms would be a mistake. A better choice may be to carve out an en suite in a large master bedroom. A new bathroom can cost around £6,500 on average – depending on the types of fixtures and fittings you want – and could add about 4 or 5 percent to your home's value.
6. Create a driveway - add up to 10 percent
In some areas of the country, the ability to park close to your front door comes at a huge premium. So, if you have the room to add parking tastefully, you are sure to increase value. For maximum added value, make sure your driveway materials complement existing paths and patios. Perhaps surprisingly, planning permission could be a consideration if you plan to build or replace an existing driveway. To avoid the need for it, use porous substances such as gravel, block paving and certain types of asphalt. It is also helpful to consider areas of natural drainage. It's estimated that an attractive driveway can add between 5 and 10 percent to the value of your home.
Hopefully this article has given you some food for thought: before you step inside that estate agent’s and embark on the mad whirl of a move, maybe you’ll stop and consider whether some highly targeted home improvements might make more sense for you.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.
You might also like...
The five-part toolkit for calming financial anxiety
The theme of this year’s Mental Health Awareness Week is Anxiety - so, if you’re feeling worried about your financial situation right now, this toolkit is for you.
What savings account suits your personality?
When it comes to choosing a savings account, the type of person you are has a role to play. Understanding your personality traits can help you pick the right account and build good money habits along the way.
How to talk to your partner about money in tough times
Talking to your partner about money can be tricky at the best of times. But during a cost of living crisis, the M word can feel more toxic for your relationship than ever before – here’s some tips to help keep the conversation positive.
Five ways to start a savings habit - and make it last
Starting a savings habit can be difficult, but saving just a little and often is a great way to get on a solid financial footing and take control of your money for the long run. Here’s how to do it.
How to boost your savings by £100s
If you’re lucky enough to have some money to put aside, it’s more important than ever to make sure your savings are working as hard as possible. Here's how you can do just that...
Let’s talk about the ‘M’ word
Whether it’s with a friend, partner or your boss - talking about money can feel awkward and embarrassing. We spoke to the Money Medics to find out why it feels this way and how we can make money feel like less of a dirty word