If you want to boost your home’s value, experts say adding a bedroom or enlarging your kitchen is the best option. Would you rather improve than move?
House prices in the UK are rising at their fastest rate in several years.
The latest figures from the Nationwide Building Society show an average 10.9% increase over the past 12 months.
Pressure to improve
This means that many people are likely to be thinking about enlarging their existing property.
For a start, those of us who need more space may now be finding it more expensive to move up the ladder.
At the same time, anyone who is planning to sell might be able to make an even greater profit by adding an extra bedroom or bigger kitchen – even after the cost of the work is factored in.
The National Association of Estate Agents (NAEA) has polled its members to find out what kind of home improvements can generate the greatest returns.
Getting the 'wow factor'
Just under half say that adding an extra bedroom is the best way to boost a property’s value.
Meanwhile a third think that a kitchen extension is likely to attract the most buyers.
NAEA president Jan Hӱtch says: "Extending a home often seems like the first and most obvious solution if there is room to do so, especially if it allows you to boast another bedroom or improve wow-factor against the competition.
"Extensions have the dual benefit of increasing available space within a property, and crucially have the potential to significantly increase value when the time comes to sell.
"Our research shows that bedrooms and kitchens are seen as the most sensible areas for expansion, and this certainly rings true when a property comes on to the market."
Conservatories less popular
The research found that just 4% of estate agents thought that adding a conservatory was the best investment, while 3% said adding a garage was the best option.
Hӱtch adds: "The number of bedrooms is usually the first criteria house hunters select, therefore if it’s possible to add an additional bedroom, there can be an immediate effect on price."
Nicholas Ayre, managing director of homebuying agency Home Fusion, says that it can be difficult for homeowners to decide whether or not to move if they need more space.
"Both moving and staying put and improving have their merits," he says.
Many would rather stay put
"Moving can mean being closer to work, school or parks for the children to play in or living in a better area but stamp duty and other fees for the mortgage, solicitor or removals can soon add up."
A study published by Nationwide last month found that a fifth of homeowners would extend their property rather than move even if money were no object.
Ayre adds: "Improving can make a space your own and add value.
"However, with planning, contractors and suppliers it gets very expensive - so it entirely depends on the homeowner weighing up the realistic costs and deciding for themselves."
If you do decide to add space, the big question is how the work will be funded.
Get the finance right
Chris Duder at mortgage broker Anderson Harris says: "If you don’t have the cash to pay for the renovations, the best option is to remortgage your home to fund the works.
"If you've been in your home for some time, the value is likely to have gone up so this equity can be freed up by remortgaging."
Duder warns that banks and building societies have covenants in place to protect the property and their investment.
"Make sure you read these before starting any renovations so that you don't break any of the rules in your mortgage contract."