Ways to Increase the Value of Your Home or Property
At Bridging Loan Hub, we appreciate that the majority of people applying for bridging finance are using the funds to renovate or refurbish an existing property. This could be their own property or one that they are looking to fix up and rent out to the public or resell on the open market. With this in mind, developers and investors are always going to be looking for ways to add value to a property and maximise their returns. Sometimes there are limitations to how much you can actually add due to space restrictions but some clever ideas mentioned below can help you make the most of your investment, taken Phil Spencer’s guide in The Telegraph:
Add a Loft Conversion – Increase by 20%
A loft extension is one of the most straightforward ways to increase the value of your home. Whether it is turned into another bedroom, shower room, kids room or home office, you benefit from the additional living space and the best thing is that the work can be completed in a few months without you having to leaving your home. A quality loft conversion starts at around £25,000 for an addition bedroom and bathroom according to Premier Lofts, but this can add 20% to the value of your property.
There are some things you will need to do, such as strengthening the floor joists and raising the floor levels. The best approach to a loft is to make it look natural and not fitted on. You will require planning permission from your local council and the whole process from planning to build can take around one year.
2. Add a Basement – Increase by 30%
This is going to be the biggest factor that can maximise the value of your property development. Ideally you want to get in there early, especially if it is a new build because otherwise all the drilling and work involved will mean that you will have to vacate your home for a period of time.
To calculate the potential return on a basement all comes down to the value per square foot. On average, it costs £200 per square foot to do the digging and then £100 per square foot to do the work, that is how the contractors charge. So unless your property’s sq foot is worth at least £300, you will not see a positive return on investment. But, if the neighbouring homes are worth around £500 to £900 sq foot then investing in a basement is a great opportunity and for every £1 you spend, you could be making back around £3.
A basement opens all new kinds of possibilities for living space, extra bedrooms, utility rooms or play rooms. They also look even cooler if you keep the stone brick effect. In Europe and the US, basements tend to come as standard but we seem to be lagging behind in the UK, which makes them all the more unique and valuable.
3. Get Rid of The Garage
Whilst a garage can sometimes be a selling point and way to increase the value of the home, you need to think about it logically. Apparently, 90% of garages in the UK are used and are just filled with junk. So you have to cost it out. If the value per sq foot is valuable in that area, turning the dusty old garage into another living space could be worth a lot. With a standard conversion of this nature costing around £10,000, you need to calculate the potential return. This renovation may not necessarily require planning permission because you are not building on top or extending the property.
4. Pave Over The Front Garden – Worth up to £50,000
Sometimes a front garden can look very nice but if it is only small, it can be a lot of upkeep for very little use. Of course it depends on the circumstances, but in a very busy urban space (like the centre of London), it could be worth paving over the driveway so that you can fit another car on the forecourt. Whilst this could cost around £10,000 to do, extra parking could be invaluable in such a busy area and it can potentially add up to £50,000 to the overall value of the estate.
5. New Kitchen – Increase by 4.6%
The kitchen is pretty much the busiest room in the house, its where you start your day and hang out after school or work. If you are a developer looking to resell or rent out the property, a well-fitted kitchen with modern appliances is essential. This includes sink, taps, fridge, stove and oven – and having the most up-to-date utilities will keep the home in good stead for the next 10 years, rather than being outdated with old appliances.
Whether or not to invest in a new kitchen comes down to the numbers. For instance, there is no point investing in a £25,000 kitchen in a home only worth £250,000 or equally spending £10,000 on a kitchen for a home worth around £1 million as it will bring the value of the home down. You need to find that sweet spot so that it can increase the quality of living and value of your home and doing so can help you add value by up to 5%.
6. Add a Conservatory – Increase by 7 to 11%
A conservatory is a nice additional living space to add to your home and can be used as a TV or eating area. The best ones are those that match the style of the house and become a natural part of it, rather than looking like they have been ‘fitted on.’ If your garden gets a lot of sunlight, maybe because it is South facing, it will continue to light up your home for extra hours of the day and warm up the house too, so you can save on your electricity and heating. With the cost of a conservatory ranging from £5,000 to £30,000, it can add between 7% and 11% on the value of your home, depending on the quality and build.
7. Tidy Up The Place, On The Cheap
Not all the best ways to add value to a home or flat require spending thousands of pounds. Even just updating the basic aesthetics can make the house seem so much more approachable and perceived more valuable in the eyes of the potential buyer. Our examples include:
- Replacing the front door and garage door with a more modern one
- Replacing doors and doorknobs around the house
- Getting new windows to match the style of the house and double glazing as a minimum is recommended
- Adding a fresh coat of paint to spruce up the exterior
- Planting more flowers in the front and back garden. It does not need to be a landscaping masterpiece but doing to your local garden nursery and picking up some plants can make all the difference.
- Even getting a new house number or signage for the house will make it look superior.
This list is commonly known as ‘kerb appeal’ which refers to making your house look better to those that see your house from the outside, or ‘on the kerb.’
Source: Home Building
8. Central Heating
Although this already may be in your home, it is considered an essential and new tenants or buyers will not want to have to install or pay extra for it. Costing around £1,000 to £3,000, it can add up to £5,000 to the value of your home.
9. Add Solar Panels
A great way to look green and modern, adding solar panels can help you or potential buyers save big on their energy bill. It is a long-term game and may take over 20 years to break even, but there are government grants where you can get solar panels for free and use them wisely can be a good investment. Costing around £5,000 to £7,000 to install, MoneySavingExpert says that you will save an average of £300 per year on your utility bill which equates to around £6,000 of savings over the next 20 years.
10. Things To Avoid
Don’t over-spruce: Avoid making the property too valuable and don’t go nuts on adding everything under the sun. You have to consider what property prices are worth on that road and that area. If every other home on the street is worth around £500,000, new buyers are unlikely to pay double to be on the same road and it will just be out of place.
Avoid DIY jobs: When it comes to making renovations, avoid using the cheapest contractors or DIY jobs as this may cause more problems done the line for tenants and new buyers if you need to make replacements.
Go easy on the furniture: Although new furniture can make a place look very smart, it does not contribute to the value of the property because new buyers are likely to have their own furniture. Even if they do want it, they will likely want it at a bargain and you may not get exactly what you spent on it.