Added value from home improvements falls | Retirement Solutions ...

A recent study from the HSBC has suggested that the value added to a property when making home improvements is falling.

HSBC?s annual home improvement survey has revealed that the only home improvement that adds more value than it did a year ago is adding a conservatory. Whilst loft conversions, new kitchens and bathrooms, new windows and carpets all still add value to a property, the amount they add is now less that it would have added last year.

Experts are suggesting that people should consider carefully the home improvements they choose to make if they are to see a return on their investment. It?s important to weigh up the cost of doing the work against the added value, as well as the benefits to your quality of life, before undertaking the work.

The high level of inflation has impacted on the costs of materials which has in turn impacted the costs of paying for home improvements.

The HSBC survey included over 1,300 homeowners and over 110 estate agents.

A loft conversion has remained the home improvement to add the most value to a home, however the added value has fallen by 23% over the last year. A loft conversion may have previously added over ?20,000 to a property value, but now it adds an average ?16,152.

The added value from a room extension fell by 3% from just over ?16,000 to an average of ?15,665. A new kitchen now adds an average ?4,557, down 19% from over ?5,500. A new bathroom now adds ?2,955, 11% less than the previous year, whilst new carpets adds ?1,738, 19% less value than they did last year.

Despite the fall in the returns that home improvements can give, the HSBC survey indicated that 52% of homeowners are still planning for a spring makeover of their home.

Paul Cutbill, a valuation expert from Countrywide Surveying Services, warned that the quality of any home improvement work will also significantly affect the added value that can be realised.

Inadequate project budgeting and planning, poor design and poor quality work will also have a knock on effect.
Mr Cutbill added: ?Whilst sensibly improved and well presented homes will generally be attractive to potential purchasers, rising labour and material costs mean that the gap between the cost of improving and monies realised at the point of any sale has been reduced.?

The news comes as Nationwide report a fall in house prices of 1% in March. Further figures from the Bank of England also indicate a recent fall in mortgage approvals.

A spokesperson from Nationwide pointed out that the economic outlook is acting as a drag on the housing market and predicted that house prices will continue to fall or move sideways over the next year.

The government have planned to introduce a new mortgage indemnity scheme to help people buy properties. But this is specifically for new build properties and it is not yet known how thiswill affect the value of existing homes.

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