What’s the best way to add value to the property in London when you buy or own one? Is an extension really still the best way to increase London real estate values? Do smart home features trump bedroom count? Will a splash of turquoise do the trick?
We have examined which home improvement strategies will really yield the maximum returns for UK property owners, and which are virtually guaranteed to decrease property value.
Quirky Design Features That May Add Value
It is estimated that 175,000 new wood burners are installed in a year according to a report from the Mail online. The appeal of fire can add value to your property but can also be a complete shot in the dark. Some home improvements literally burn London real estate owners’ money due to rapidly changing design trends, and misguided choices.
Fashionable home makeovers can help vendors to sell homes quickly and fetch attractive offers. That is providing they are presented to prospective buyers or tenants which share the same tastes, and they are marketed rapidly after completion.
Top 5 Tangible Value-Add Improvements:
Those seeking to add substantial and tangible value to their homes and flats in London, and who may not plan to sell immediately may be best served looking at more functional improvements and additions.
1. Building Extensions
Extending the floor plan of your London home could be one of the best moves in terms of returns on investment. A Nationwide Building Society report found that for every 10% of floor space that is added, can add up to 5% in home value.
2. Loft Conversions
Loft conversions can be especially profitable for London homeowners, adding as much as 10%-20% in value. Going up can be cheaper than extending out while preserving garden area, and far cheaper and less stressful than basement additions or conversions.
3. Adding a Second Bathroom
Second bathrooms are highly desirable in London. In a Nationwide House Price Index Special report, it found that they can actually add more to the value of a property in London than adding a bedroom, due to how buyers prize space, versus room count, which is often the opposite in the rest of the country.
4. Build a Conservatory
A conservatory can add significant uplift to the existing value of a home. However, constructed poorly, it could actually reduce the perceived value of a home by far more than that.
5. Go Green
Adding full central heating can elevate London property prices by a little over 8% according to a Nationwide report. However, many energy-efficient improvements could ultimately add even more, while reducing living costs during the time the property is owned. With new home builders devoting extensive resources to green home construction, those properties which are not green will be seen as inferior on the market.
4. Affordable Hybrid Home Improvement Ideas
Enhance Outdoor Space
The garden has become the most important ‘room’ in the home, and for some can be the most “financially rewarding” according to the Express. Squire’s Garden Centres says London homes with green areas can be worth 115,000 pounds more than comparable properties without them. Ugly, overgrown gardens can be a turnoff, but well-kept ones may add incredible appeal.
Pergolas and enhanced outdoor living areas can win potential buyers in an instant. However, experts do warn that going too far with swimming pools and hot tubs could detract from value by reducing the buyer pool, and may not see investments fully recouped.
Smart Home Technology
This is another grey area, which increases appeal but may not deliver hard money on a valuation. Smart homes are in, especially with London home buyers. A This Is Money report and comments from a Rightmove representative call fast broadband “a hugely important factor,” which “should not be underestimated.”
Insurance site Policy Expert recommends adding parking space for London properties and advises a single parking space could increase a home’s value by 5%. Extra parking spaces can be let to city workers at very attractive rates. Parking spaces may be rented directly, or through online brokers. Those with plenty of parking and a garage may consider a garage conversion. Santander banking group says the average conversion adds over 7,000 pounds to property value. Garage conversions may also provide living space which could be let to a lodger to bring in more income.
Dividing Your Property
A more aggressive strategy could be dividing your property. Those with enough space could sell off part of their property as a building lot. Or an additional unit could be constructed enabling owners to live in one, and selling or letting the other to cover costs, and even retire any debt.
Don’t Do This…
It is absolutely critical for London property owners to avoid making expensive blunders which could not only see their capital invested, wasted, but could tank their home’s value.
- Never reduce the number of bedrooms
- Avoid garish and unique kitchens
- Beware of installations which won’t cover their costs
- Keep decoration neutral
Even major kitchen renovations can be huge losers. Buy Association warns to avoid over-improving beyond the area price range. For example; investing 30,000 in a kitchen when a home is already valued at the top of the local market. Buy Association recommends avoiding these mistakes by seeking advice from a local estate agent.
Ask Yourself These 3 Questions
1. Who will do the improvements?
Botched, and uncompleted improvements can take away far more in property appeal than the finished product could have added. So will you make the commitment to see it through to the end, or hire a pro from the beginning?
2. How soon will you sell?
Will you live in the property long enough to enjoy the improvements, regardless of whether they ad real value or not? Or are you best served selling quickly in order to maximize the rewards of the improvements? Recognize that these projects notoriously always take longer than expected, and cost more. Could this make it harder to sell, rather than easier?
3. Is it better to sell and move now?
Between the new capital gains tax on London real estate, and potential for rising property prices and interest rates in other destinations, many might be better off securing a quick sale, to enable them to move up to the home they really want while the stars are aligned.