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If you’re thinking about selling your house, it’s likely that you want to know how to make sure you’ll get the best price for it. The money you walk away with might be the difference that means you’re able to afford your dream home, live in a certain neighbourhood, or take a long holiday.
One way many people try and boost the value of their homes is with renovations. Home improvements can be as small as repainting, or as large as an extension.
But, are renovations really worth doing before you put your home on the market? We take a look below.
What does renovate mean?
The literal definition of ‘renovate’ is the act of restoring something, usually an old building, to its former, better state.
But, in recent years ‘renovate’ has also come to encompass a whole host of home improvement activities. When people talk about renovating their home, they might be adding new rooms, making repairs, or redesigning their space.
Renovating is all about making improvements - decorative or structural - to a property.
How much do home improvements increase value?
Most advice guides will give a generic measure of how much value certain home improvements add to a property. But, the truth is that the value they add can vary widely depending on what your home already offers.
There are also regional disparities in what home buyers think are important features, and this can impact the value of certain home improvements.
For example, according to research by the Home Owners’ Alliance in association with the Federation of Master Builders, converting an under stairs cupboard into a downstairs toilet is a pretty good idea in Surrey. This renovation could add over £20,000 to the value of your home. However, the same renovation in Cambridgeshire was found to add just under £10,000 in value.
If you’re in London, you’re likely to see the highest return in value from converting part of your master bedroom into an en-suite. But this renovation has pretty disappointing returns if you live in the North East.
Although the exact value of renovations varies, some do have universal appeal, and are likely to increase the value of your home, regardless of where you live. Making sure your home is: in a good state of repair and offers high quality versions of the facilities home buyers in your area are after will stand you in good stead to maximize the value of your home.
Which renovations should I do before I sell my house?
In most cases, it’s not feasible to undertake lots of renovations. Home improvements take time, and can be intrusive or expensive. So which renovations should you prioritise if you’re looking to sell your home soon?
The most important thing to do if you’re selling your home is to fix any outstanding structural problems. Anything wrong with the structural integrity of your property can massively impact the value of your home. This is because structural issues can make it difficult for buyers to get a mortgage. So, if you don’t fix the problem before you sell, you’ll limit your pool of buyers to just those who can purchase in cash. Usually this means you’ll have to sell for less too.
The sort of structural issues that should take priority when you start renovations include:
A leaking roof
Missing roof tiles
Structural cracks in internal or external walls
Rotten joists or roof timbers
Insect infestations - particularly woodworm, which burrows into timber and destroys its structural integrity
Repairing these issues are likely to be the most expensive type of renovation. But, they will also add a huge amount of real value to your property. They can even be the difference between whether you’re able to sell or not.
You should consider fixing these problems as absolutely essential to increasing the value of your property.
Decor and Cleaning
On the other end of the spectrum are small cosmetic changes, like: repainting, cleaning, and thoroughly decluttering. Although it’s hard to pinpoint the exact amount these improvements add to your property’s value, estimates suggest it could be up to 5-10%.
A well maintained and tidy property is more attractive to potential buyers. Some buyers will be put off by the need to redecorate, or might put in a lower offer if there’s lots of little changes that need to be made. So making sure the cheap and quick to rectify problems are resolved before viewings will mean your home attracts a premium once it’s on the market.
Start by fixing the following things:
Peeling paint or wallpaper
Sticking doors and windows
Mouldy sealants or dirty grout (particularly in the kitchen and bathroom)
Loose tiles or wooden flooring
Smells - from your bin, drains, or bathroom
Finding ways to add in extra bedrooms, bathrooms, or storage space, can be an effective way of boosting the value of your home.
Extra bedrooms, particularly if they have an en-suite can add a lot of value (especially in London). Rather than dividing up the rooms you already have, consider converting your garage, loft, or cellar into additional living spaces.
Research by Nationwide found that a loft conversion which includes a double bedroom and a bathroom can add up to 20% to the value of a 3 bedroom, 1 bathroom property. And, an extra bathroom might increase the value of your home by around 5%.
If this level of renovation is too expensive or intrusive to be possible before you sell, the next best option is to maximise your storage space. Consider putting up a shed in your garden, storage units in the cellar, or adding shelves in the spaces either side of a chimney breast. Adding extra storage space demonstrates to potential buyers the functionality of your living space (and can help you keep your home tidier for viewings too).
Do renovations always increase property value?
Renovations can be really expensive, and if you’re selling it’s important to be confident that you’re going to make a return on your investment. It might seem common sense that the bigger the renovation, the better the value return, but this is not always the case.
To make the most effective investment, it’s important to think about what the potential buyers in your area want.
If you’re considering adding a bathroom for example, consider how your target buyer would like it. A study by Direct Line Insurance found that even though more bathrooms are generally considered by a good thing, almost half of potential home buyers in the UK (44%) wouldn’t consider buying a property if the main bathroom was on the ground floor. However, those looking for more accessible homes, because of their age or mobility, were more interested in properties with ground floor bathrooms.
So, if your target buyer is a young family, a bathroom on the ground floor is unlikely to be a good investment. But, if you live in an area that attracts many retirees, like Eastbourne, a ground floor bathroom is likely to be very appealing.
If you’re unsure where to start, talk to your local estate agents. They will know exactly what the buyers in your area are looking for, and which property features add the most value. You can find, and talk to, the best local agents in your area for free with our nifty comparison tool.
Renovations to period properties also pose unique challenges. It’s vital to be sensitive to the style of your home or you might end up decreasing it’s value. For example, double glazing windows can do a lot to increase the value of a property. However, if you’re updating a period property, certain styles of frames and materials can be inappropriate. You may have to spend more to avoid using PVC frames.
It may be more cost effective to showcase your home’s original features, rather than undertaking big renovations. If you have beautiful fireplaces, decorative mouldings, or original parquet flooring, take the time to ensure these are in good condition.
Things to consider: Return on investment
When thinking about how much home improvements increase the value of a property, it’s important to consider both what they add to a home, and how much they cost to do in the first place. This will help you figure out the ‘rate of return’ of each home improvement, and help you decide whether the increase in value is worth the initial spend.
It’s also worth thinking about whether a renovation will impact another element of your home. For example if you add a conservatory, will you lose value by reducing the size of your garden? Or if you convert your loft into a bedroom, will you lose your principal storage space?
In all cases it’s worth taking the time to compare what you are gaining with what you are losing - both financially and materially. This will help you figure out how much value you’re actually gaining from your renovations.
As part of your calculation of ‘return on investment’, remember to take into account the ‘ceiling value’ for properties like yours, on your street and in the wider local area. The ‘ceiling value’ of a property is the maximum price a buyer will spend on a house before they would be more likely to purchase a ‘better property’. What a potential buyer will consider a ‘better property’ will depend on their personal preferences. Usually it will be something bigger, with more land attached, or in a more desirable location.
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