New data from the Nationwide looks at the factors that affect the values of homes as well as the potential to add value.
In particular it looks at more substantial projects to increase the size of the property.
Nationwide chief economist Robert Gardner says: “Location remains key to house values, but other factors, such as the number of bedrooms, are also important to homebuyers. Home improvements that increase the size of the property, such as an extension or loft conversion, remain a compelling way to add value.
“Having more useable space is generally thought to be consistent with better quality accommodation and people are prepared to pay for it.
“A 10% increase in floor space, all things equal, adds 5% to the price of a typical house. But our analysis suggests that it is additional bedrooms that are key to adding value. For example, adding space to create an additional double bedroom can add 13% to the value of an existing two-bedroom house.”
He says investors who add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24% to the value of a three-bedroom, one-bathroom house.
What are the most popular home renovations?
Nationwide has confirmed the popular belief that kitchen and bathrooms renovations were the most popular amongst owners who have made improvements to their home in the last five years, with 71% undertaking either, or both, of these.
Gardner continues: “More than two in five (42%) added a bathroom or an ensuite, whilst 25% added an additional toilet.
“Of those undertaking work, around a third (34%) made green improvements to their property, with over half of these (56%) adding solar panels.”
He adds that solar panels are becoming an increasingly popular feature, with nearly 1.5 million dwellings in England having photovoltaic (PV) panels, equating to nearly 6% of total dwellings (up from less than 3% in 2013).
“Younger homeowners appear to be most interested in greening their homes, with over two thirds (69%) of those aged 25 to 34 who had renovated in the last five years making green improvements.
“Older homeowners (those aged 55 or above) were least likely to have made green improvements (just 18%), with bathroom renovation being the most popular amongst this demographic (68% of those who had made improvements opted for this).”
Amongst non-investor owners the most popular reason for renovating was to make the property look nicer (54%), while 35% were looking to boost the value of their property, with the latter being the most important factor for younger homeowners.
Some 32% of those surveyed made improvements to modernise the property to make it habitable, while 26% were looking to add more space. Just 7% were renovating in preparation for a sale.
