How the DIY Boom is Boosting House Prices
Daily Express, Thursday June 26th 2008
by Sarah O'Grady Property Correspondent
Home sellers are honing their skills to add thousands of pounds to the asking price.
And while simple decorating jobs can do the trick, building work can put as much as £54,000 on the value of the average house, research found.
Two-thirds are planning to redecorate in the next year, almost six in 10 intend to give the garden a makeover while 44 percent will undertake maintenance jobs.
But an ambitious one in five are keen to take on bigger projects, such as an extension, and 11 percent want to mae their home more environmentally friendly.
Up to 3.3 million people - one in eight property owners - hope to put up For Sale boards in the next 12 months - half of them after making improvements to get the best price, say mortgage lender Alliance & Leicester today.
However, research by GE Money Home Lending found that people who want to significantly improve their value should add living space.
The group, which consulted 110 estate agents, reveled that a loft conversion had the biggest impact on a property's price, boosting it by 12.5 percent, or £22,953 based on an average home worth £183.626.
Creating an extra room in an extension increases value by about 11 percent, or £20,000, while adding a conservatory pushes it up by seven percent, or just over £12,000.
These three improvements combined could add £54,922 to the value of a typical three-bedroom semi. Smaller projects can also have a big impact, with a new kitchen adding almost five percent to the asking price - £8,447 - with central heating, new windows or a bathroom adding around three percent each.
But estate agents do no believe making a property more environmentally friendly will make a major difference to the price. They claim that solar panels would add just 0.8 percent to the value.
Gerry Bell, head of mortgage marketing at GE Money Home Lending, said "The current housing market means that more people are looking to improve their home. 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."
Richard Taylor, at Alliance & Leicester, added: "Even within the current climate, there are still millions of people who are looking to move and they are doing all they can to get the best price."
Simon Smith, of home improvement website Betternest.co.uk, said: "Adding space will always add value if done correctly. A lot of home owners have only the vaguest idea about their property's potential. It's like having a Mercedes in the garage an never using it."
Meanwhile three major lenders, Bradford & Bingley, First Direct and the Co-operative Bank, put up their fixed-rate mortgage rates yesterday. The rate changes have come the day after the average tow-year fixed rate mortgage hit 7.02 percent - the highest level since 1997.
However, the UK's third biggest lender, Abbey, announced it was reducing the arrangement fees on its offset mortgage range by £1,000 to £1,499.
The move follows a call from the Chancellor Alistair Darling calling on lenders not to take advantage of consumers by charging unfair arrangement fees.