The property market is incredibly competitive at the moment. The smartest investors look for ways to add value to property as a way of maximising profit. We base our recommendations on a property of average value in the UK (£259,745). If you invest at the lower end of the property market the picture changes. You would be unlikely to recoup your money if you spent £18,000 on a loft conversion for a £50,000 house.
On lower value properties different improvements such as central heating, and double-glazing are likely to make a bigger impact on profit and or any future valuation. There are likely to be regional and local variations in the profitability of each improvement.
We have aggregated research from lots of sources to give you the 10 most profitable home improvements.
1. Adding a double bedroom and bathroom through a loft conversion
Nationwide carried out some research that suggests that a loft conversion of this type is the procedure that tends to add the most value. If executed correctly their research says that it can add up to 21% to the value of a house typically £54,000. Repolist believe that this sort of uplift is more likely to occur in a street where the house being improved is neither the largest nor the most expensive. Always look for price precedents that support your new-uplifted valuation.
2. Adding an extra bedroom by way of extension
The same research by Nationwide indicated that adding an extra bedroom through an extension tended to add 13% to the price of the average property circa £28,000. The percentage return on an extension is actually greater than the returns made on a loft extension. It is important that you look at the likely returns in your individual circumstances before making any decisions. Nationwide also note that turning a 2 bed house into a 3 bedroomed house gives the maximum percentage uplift whereas adding a bedroom to a 3 bed semi typically adds only 9%.
3. Mending the roof
If a house has missing tiles on the roof and or weeds growing out of the guttering prospective purchasers tend to discount their offer based on a worse case scenario rather than the actual cost to fix it.
According to the estate agent group Spicerhaart upgrading a tired kitchen is the single most profitable improvement that can be made to a property. This is contradicted by HSBC research, which suggests that a well-appointed new kitchen will add £4750 to the value of a house over and above the typical expenditure of £9600. This is a return of 49% on capital invested.
5. Replacing old carpets
Old and worn carpet particularly around high traffic areas in a house create a tired feel and any prospective purchaser might be led to feel that this will be an expense for him or her in the future. Research suggests that an expenditure of £2000 on carpet is likely to realise profit of about 50%
6. Building a conservatory
We really struggled with this one. The Zopa report suggested that a typical conservatory that costs £5300 would return £5750 of profit on sale or 108% of capital invested. We are aware of lots of contradictory evidence, which tends to show that the mark up on a conservatory is marginal. For that reason we couldn’t give it the no 1 slot. Conservatories have to be done very well to add anything to your experience of a house. If you are going to build one make sure that you are very clear how the new space will be used.
7. Eliminating shoddy DIY
A survey of 2000 buyers carried out by Trustmark demonstrated that purchasers will discount a house by a whopping 11% where shoddy DIY was apparent. On the average house this is a sum in excess of £25,000. Old or dodgy looking electrical wiring was deemed to be the most off putting feature. There are lots of houses like this to be found at auction
8. Upgrading the bathroom
The benefits to a nice new and clean bathroom are obvious really. The typical average spend is £4900 and the average profit derived from that expenditure according to Zopa is £2350 or 48%. What should be becoming obvious is that there is money to be made restoring poorly fitted houses into presentable condition even if you pay the market rate for this kind of property. This profit opportunity is not available if you buy a nice property and refurbish it just for the sake of it.
The jury is out on Garden features. We feel that nicely laid out gardens have a subjective value that is hard to quantify. The report suggests that a £4550 spend will return a profit of £4000 or 88%. We feel that to achieve this sort of uplift the garden would have to be fairly large and in terrible condition to begin with. Don’t focus your efforts here unless it is an obvious winner.
10. Property Exterior
Again this is one of those improvements, which may influence the perception of a property’s general condition rather than anything more substantial. The Zopa report implies that the average expenditure of £6000 leads to a median profit of £4,500. We would need a lot more detail of the kinds of procedures listed and whether they were remedial or cosmetic before we are convinced of that. On that basis we put this one in at No 10.
So once you have done the improvements then have the house valued and
If you are looking for a Surveyor to value your property or to value a property you are buying give us a call on 0845 463 8979 for more details
If you prefer to contact direct call Geraldine on 07828 989 477 or Marion on 07885 543 428
Visit our website www.taylorwilkinsonltd.co.uk