Economist says location remains key but other factors are important to homebuyers too
Home improvements which add floor area, such as an extension or loft conversion, can increase the value of a property by a quarter, research from the Nationwide Building Society has revealed.
Extending to accommodate an extra bedroom can enhance the value of the house by nearly 15%, while putting in an extra bathroom adds 6% to the value of the average home.
“Homeowners that add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 25% to the value of a three-bedroom, one-bathroom house,” explained Andrew Harvey (pictured), senior economist at Nationwide Building Society. “This has increased from 22% in our 2016 research feature.
“Our analysis suggests that, providing the room is useable, adding an extra bedroom can be a good way to increase the value of a property.”
Harvey added that while location remained key to house values, other factors, such as the size of the property, including the number of bedrooms, were also evidently important to homebuyers.
“The pandemic period was characterised by a ‘race for space’ as people re-examined their housing needs, although more recently there have been signs that some of these patterns may have unwound, at least partially,” he said. “Having more useable space is generally thought to be consistent with better quality accommodation and people appear to be prepared to pay for it.”
English Housing Survey data suggests that 87% of owner-occupied properties have at least one spare bedroom, with more than half, or 53%, classified as ‘under-occupier’ or having two or more spare bedrooms.
“However, the increase in home working means that some of these spare bedrooms are now more likely to be used as a home office or study,” Harvey pointed out. “Additionally, many householders buy properties they intend to grow into over time, as their families expand and, probably more significantly given demographic trends, people remain in properties after their children fly the nest.”
The Nationwide research also found that, aside from extending, other ways of making a home more valuable included making it more energy efficient.
“Given cost-of-living pressures, energy costs remain a concern for households. Further, decarbonising and adapting the UK housing stock is critical if the UK is to meet its 2050 emissions targets, especially given the housing stock accounts for around 20% of the UK’s total carbon emissions,” Harvey said.
“Over the past 10 years, energy efficiency has improved significantly thanks to the higher energy rating of newly built properties and the improvements carried out on many existing homes, such as loft and cavity wall insulation. The latest data (from 2021) shows 47% of the housing stock is now rated ‘C’ or higher, up from 16% in 2011.”
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