Prior to carrying out any works of repair, renovation, modernisation and improvement, you need to be sure that they will add value either to the property or increase the rental value. That is, unless there are other good reasons for doing the work, such as, we are obliged by law to undertake them, or the works will increase saleability. The big question is how much value do individual items of repair, renovation, modernisation and improvement add?
It is crucial to remember, cost does not equal value. It is important to remember when planning to refurbish a property that the cost of the refurbishment will not always be directly reflected by increased value. Just think about the £20,000 kitchen in the £60,000 terraced house.
It is therefore very likely on occasion that you could spend money on a property but not increase the value by as much as you spend, and in some instances you may even detract from the value.
Similarly, looked at the other way, this works in our favour because it also means that we can spend money on a property but disproportionately add value to the property, increasing its equity and therefore our wealth or the profit within the property.
We often get asked if there’s a list anywhere, or a website, which shows how much value different works of repair, renovation, modernisation and improvement add to the value of a property.
Or if there’s a formula we can use, to work out how much value is added.
Unfortunately it’s not as simple as that.
The amount by which any work of repair, renovation, modernisation or improvement will add value to a property will almost always be market driven and will depend on the demand, requirements and expectations of the market in that area.
- Adding a bedroom and a bathroom through an extension or loft conversion can add over 20% to a property’s value.
- Extending to accommodate an extra bedroom can add over 10% to house value.
- An extra bathroom adds 5% to the value of the average home.
- Semi-detached house 2 bed to 3 bed plus 12%
- Semi-detached house 3 bed to 4 bed plus 9%
- Detached house 3 bed to 4 bed plus 9%