James Max
The home improvements that are shrewd investments – and what to avoid
Is the property market stagnating? According to the latest figures from the Nationwide House Price Index you could be forgiven for thinking that everything’s tickety-boo. Prices are up 1.7 per cent and annual growth now running at 12.6 per cent with the typical home up to 20 per cent higher than in February 2020. However, with inflation on the up, higher interest rates are on the way. Rising costs of living are seemingly out of control and there is increased market and economic uncertainty resulting from Russia’s invasion of Ukraine. Whether the market remains competitive or stagnates, why move and go through all the hassle and expense when you could simply use the money you’d spend on agent’s fees and stamp duty to invest at home? If you take on the right projects, you’ll find you can add value and put yourself in a better position to sell further down the line.
Value is generally added by improving one of the following key attributes of a home:
Space
Adding space, or improving existing space is arguably the best way to generate immediate returns from your home, even in a sluggish market.
It’s obvious to suggest that if you add space to a home that it’s going to be worth more. But not all space is equal. Make a master bedroom larger or create underground space that has little function or natural light, and you won't produce the investment returns you’d like to see.
There are three certain ways to achieve instant returns. The first is a loft conversion. Well-appointed space with good natural light and an ensuite often adds value. Just make sure you get the insulation right, include an ensuite bath or shower room (even if the space is for lounging around as an incomer may wish to turn the space into a bedroom) and get the lighting right too. Floor to ceiling heights are often compromised. Just because it’s in the loft, doesn’t mean you shouldn’t be able to stand up properly.
Nationwide concludes in recent research that up to 20 per cent of a property’s value can be added from extending into the loft. Inevitably the increase in value depends where you’re located, with urban areas with a higher per sq ft value likely to benefit most. Adding an ensuite? According to Savills, that could add between 3 to 5 per cent to a home’s value. All food for thought when you’re doing the all-important analysis.
Thirdly, you can improve existing space. How often have you thought that a friend’s home could be so much nicer if they knocked out a wall or changed the layout? Lazy advice will suggest re-doing a kitchen or bathroom to add value. Unless what you have is an abomination, you might find this doesn’t realise its true potential. Better space rather than expensive décor adds more value. No one particularly appreciates a dining room, however nicely it’s done up. Nor will a swish bathroom sway a buyer when deciding on a house.
Creating a multi-purpose living space that feels expansive and customisable is a better bet that focusing on individual rooms. Creating a congruence between inside space and outside space, whether that's through bi-fold doors or a newly done up patio, can make living areas feel bigger and more adaptable.
If you install a new kitchen in a space that’s too small or poorly laid out, you might as well scoop up the cash you’re planning to spend, open the front door and throw it into the street.
Amenity
If we have learnt one thing from the pandemic, it’s that amenity adds value. Homes that can accommodate work and play with flexible space add to our lives but also to the value of a home. Working from home is unlikely to go away. Whether it’s a well-appointed shed (with power, heat and light) or a useful working space within a home – both will add value. But beware of gimmicks. If you think installing a hot tub will rocket the value of your home, you’d best think again. Instead, investing in a good-sized terrace that’s well laid out, with power points, outdoor heating, seating areas and BBQ perhaps with outdoor kitchen facilities will prove popular with buyers.
And don't forget storage – it's boring, but often at the forefront of buyers' minds when they are thinking through the practicalities of a home. In the past garages have been turned into living space. With increased interest in electric cars, you’d probably get more value from putting in a fast-charging point and keeping your garage. I’ve never been a fan of turning space that can be used for one thing, into another.
Features
Owners regularly tire of features in a period home. Modern makeovers often remove history. It’s a false economy. Years ago, I owned a period urban house. It had an original Victorian staircase, cornicing and tiles in the hallway. A purchaser decided to strip it all out replacing the stairs with a floating staircase and clean modern lines. When it came to selling, buyers voted with their offers. Despite the money spent, the house down the road in worse condition with original features achieved a higher price. Original windows (leaky as they might be), cornicing, built in wardrobes or fireplaces, if they’re original tend to add value. Removing them can be costly and not provide a return.
That said, adding new features that make your home stand out from the crowd can be a worthwhile investment. Perhaps a spiral wine cellar dropped into a kitchen floor with glass doors. Or a larder with slate storage shelves. Space for a glass fronted wine fridge or even tech built into a home. Especially if they’re good speaker systems (such as Sonos) or the new wave of lighting devices that combine light and sound in single units. These features wow a buyer and if they’ve been well thought out and expertly installed, you’ll be able to see a return on your investment. Beware of just plonking stuff in though. Too many homes have had features that have been ill-conceived or eclipsed by technological changes, leaving the owner with nothing but a headache.
Efficiency
It was double glazing back in the 1980s, conservatories in the 1990s, side returns in the noughties and solar panels in the 10s. The Energy Performance certificate, or EPC, has come sharply into focus. According to Strutt & Parker, a move from G to E, or D to B could add 14 per cent to the value of a home. Again, it’s dependent upon where the property is and is likely to apply to generic homes rather than unique or larger assets. That said, the noose is slowly tightening on those homes that waste energy. Driven by the government’s dash to ‘net zero’ Business Secretary, Kwasi Kwarteng has stated that property lenders must see an average EPC rating of ‘C’ across their portfolios by 2030. For some sectors this impact is being felt now. Skipton Building Society, for example, won’t lend on rental properties with an EPC of E or below. And this could affect you, if your ultimate buyer is knocked out because they can’t let your home. However, efficiency can go too far. Solar panels that ruin a home’s aesthetic? They’re a no. Be careful what you install as some devices may save on running costs, but an incoming buyer is unlikely to be persuaded to pick up your bill for the installation.
Style
It’s often said that money cannot buy taste. Homes that have been lavished with expensive fittings and fixtures will often sell for a similar price than a more moderately decorated property down the road. Sometimes, however, style can add value. And that’s when style and taste have been matched by meticulous planning, quality of work and layout. It’s easy to spend a lot of money on soft furnishings and curtains. Rarely will a purchaser pay a premium for such things. Similarly with paint. Who is going to know whether it was an Edward Bulmer, Little Greene, or bog-standard Dulux? What they will notice is whether the colour scheme works and whether the decoration makes the best of the space. And then there’s light fittings. Often homeowners put the wrong lights in the wrong places. A lighting scheme, like anything else, should be designed, thought about and installed with precision. And the same applies to doors and windows too. A well curated home will fetch a better price. Consider employing the services of an interior designer or use the services of an interior design team who can help you imagine and then realise your aspirations.
