The benefits of adding an extension to your humble abode are numerous. It can not only make a greater amount of practically usable space in the building, but also also boost your home’s value. By how much exactly? It’s tricky to provide an answer, as it depends on many variables; however, here is an in-depth insight into a surprisingly complex subject.
So, what’s the average rate of improvement?
Earlier this year, Nationwide Building Society reported its calculation that adding an extension or loft conversion to the average property could add £42,700 – or, to give a better idea of the degree of improvement, about 22% – to its value.
Robert Gardner, chief economist at Nationwide, explained that the more usable space a property has, the better quality it is perceived to be by home buyers, who are willing to pay higher prices accordingly. Adding further colour to the report, Gardner said: “Homeowners who add a loft conversion or extension incorporating a double bedroom and a bathroom can add more than 20% to the value of a three-bedroom, one-bathroom house.”
It’s a matter of location, too
So, you now have a better idea of what Nationwide has defined as an “average property” – the definition you had in your own mind may well have been different. That’s understandable, as home prices can vary hugely across the country and so the scope for growing the property values can be similarly inconsistent.
Precisely how inconsistent? The Barclays Mortgages Home Improvement Report 2015 can clear things up for us. This report includes the results of consumer research carried out by Mortar London, on behalf of Barclay Mortgages, with 2,000 respondents – and, it turns out, homeowners building an extension spanning 30 square metres can expect an impressive return of investment reaching, in London, up to £156,000 and, in the rest of the UK, £14,000 on average. There’s obviously a lot of room for variation in-between those figures!
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While acknowledging that “location remains key to house values”, Gardner has insisted that “other factors such as the size of the property, including the number of bedrooms it offers, are also important to home buyers.” And the differentiating factors don’t stop even here; Gardner has wisely pointed out: “Ultimately, of course, the decision to invest in the home is an individual one, taking into account the costs and hassle involved, as well as potential benefits.” In short, blanket figures might not always provide sufficiently accurate indicators.
However, there is another way in which you could get a clearer picture of how much value an extension could add to your particular property. What is that way? Turning to My Build Estimate to get an accurate estimate for how much an extension would cost you to build. With this information in your hands, you can then account for the other variables that we have mentioned. As a general rule, the more you spend on that extension, the more added value you should reap – but do remember to spend carefully…