You’d think, wouldn’t you, that the bigger the home improvement, the more it would add to the value of your property? In reality a major home extension – say a new bedroom or loft conversion – generally costs more to build than the value it adds, according to a new study by Go Compare home insurance, making it a very poor investment.
On the other hand, the relatively modest investment of a new boiler, central heating system or cavity wall insulation are amongst the most profitable home improvements you can make – which is good news for Harpers customers looking to upgrade or sell on their properties.
The actual profit you realise will obviously depend on the system you install and the value of your property, but typically a new boiler installation of, say, £1995, will add £8000 to the value of your property, which means you realise a profit of £6005 on the transaction. Clearly a no-brainer!
Similarly, a new central heating system at a cost of, say, £4250, will add £8000 to your house price, representing a near 100% profit on the deal.
By contrast, building a home extension at a cost of, say, £48,000, would only add £30,000 to your property value, representing a loss of £18,000, and adding a bedroom at a cost of, say, £22,500, would only add a paltry £6000, representing a massive loss of £16,500!
So why, you might ask, do home improvements like a new boiler or central heating system, score over bigger projects? Apart from the cost conversion factor, the difference often comes down to personal taste and preferences. So long as it does its job efficiently, no-one really cares what a boiler looks like (it’ll probably be out of sight anyway!)
By contrast, new home buyers generally care passionately about the layout and décor of their living spaces, and when they move into a new home they want to put their stamp on it, even if the property is in good order and newly decorated. So, any ‘improvements’ you have made may not be seen as such by your buyers.
Having said that, if you go to the trouble of obtaining planning permission for a home extension or conversion – and leave the actual construction to the buyer – it makes a useful bargaining chip when negotiating the sale of your property and may very well enable you to up the asking price.
The examples we’ve given are based on average costs and estimated returns, but for a more accurate idea of the value a new boiler or central heating system could add to your property, we’d be glad to call by appointment and give you a detailed quotation.