WILL AN EXTENSION ADD VALUE TO MY HOME?

MAKING SURE YOU KNNOW THE FACTS….

One of the biggest misunderstandings with home improvements is the difference between what increases value or makes a property more saleable, and what actually adds value to your property. The difference lies in understanding what an ‘Improvement’ is and what’s an ‘Addition’ is, both of which may make your property more desirable and therefore easier to sell.
In simple terms they can be defined as:

Improvements are ‘Anything you add to your home’, such as: new Kitchen; new Bathroom; new Windows and doors; new conservatory; or anything else that does not directly change the structure of your house. Improvements generally do not add value to your house, other than the cost of the addition, but they will often make your house more desirable and therefore easier to sell.

Additions are ‘Anything that you add to the structure of your home’, such as: building a new extension; converting the loft into a room; anything else that changes the structure of your house. Additions will add value to your home provided it is the right addition, such as making a 2 bedroom house into a 3 bedroom house; a larger kitchen with family room; etc. and they will make your house more individual, more desirable and ultimately easier to sell at a higher price.

So keep in mind a simple rule, if it costs more money chances are it will add real value to your house, and anything that changes the house from the way you bought it should increase its value. If what you are doing does not materially alter the house from how you bought it, it may make it easier to sell but not for a higher price.

We would also refer you to a recent study prepared by GE Money Home Lending in July 2008 (based on interviews with 110 estate agents across the country and current residential property prices) which found the best way to add value to a home is to add additional living space in the form of a loft extension or an extension:

The research found on average a loft conversion would potentially add £22,898 to the price of a property, whilst building an extension could increase the value by approximately £19,800.
Adding a conservatory, the third best way to add value to your home, could increase its value by around £12,229. These three improvements combined could add £54,922 to the value of a typical home, GE Money said.
Gerry Bell, head of mortgage marketing for GE Money Home Lending, said: “The current housing market means that more people are looking to improve their home rather than move. However, before embarking on any improvements, it pays to know which ones will add the most value to your property. Region, type of property and location are all factors which will determine which improvement is best for a particular property, with the creation of extra living space continuing to be the best value improvement.”
Extract from informed mortgage choice ‘mform.co.uk’ July 2008

This information is based on our views and experience, however, we would always recommend that you take further advice from if you require.

Finally, we would add that whilst decisions on making changes or additions to your property should be based on sound financial reasoning, it is equally important when developing your home that you consider how the house works for you now and will in the future. Making the correct changes and additions to your house can have a profound effect on the way you and your family ‘work, rest and play’ out your life and getting the design, finish and amenities right will ultimately increase the enjoyment you and our family have in it for many years to come….something you often can’t put a price on.

By engaging Grid Design we will tailor our services to suit each project, our clients experience and requirements in an effort to avoid any of the above.