Updated: Jan 17, 2021
The market value of a house is determined by what a ‘willing buyer’ would likely pay a ‘willing seller’ and a valuer or surveyor looks at the same things a potential buyer would when assessing the worth of your property. They use evidence of what similar real estate in the area has recently sold for, and how its condition and features compare. Improving on those features can significantly improve the valuation of your property if you are looking to maximise its future sale price.
What adds value to a house?
Economic conditions can cause property prices to fluctuate, but for most of the UK they have steadily increased over time as demand outweighs supply. However, rather than just buying a house and hoping its price will go up if you hold it for long enough, there are various methods that property investors and shrewd homeowners can use to force an increase in what your house is worth on the open market. Even if you are not looking to sell right now, it’s worthwhile adding value to your home to increase your equity. After all, the last thing you want is to be in negative equity if you find yourself at the wrong end of market conditions when you do want to.
One thing to remember before forking out and going 'all in' with all the bells and whistles, is that every area or street will have a ceiling value for certain types of property; an upper limit that buyers just won’t go beyond to live there, no matter how nice it is inside. With that said, here are ten things you can do to increase the value of your home.
Fix structural defects
Structural defects will usually make a property unmortgageable, eliminating about 70% of potential buyers, so fixing this adds the most value to a house. If you have any structural issues, there’s no point doing any internal or cosmetic work until this is taken care of. Common defects in residential properties include damp, subsidence and structural defects caused by rot or improper alterations.
Make it more presentable
This is one of the cheapest and easiest ways to add value to your home. At the very least a good clean and tidy is a must before a surveyor or potential buyer visits your home. A spot of painting and decorating with a neutral colour scheme, replacing worn-out carpets and adding some nice light fittings goes a long way. A valuer or potential buyer will form an impression when they first approach the house from the outside too, so things like mending the fence and a spot of landscaping on the front garden will add great ‘kerb appeal’.
Increase energy efficiency
Not only is improving the energy performance of your property good for the environment, it will lower the cost of energy bills and therefore make a property more desirable for buyers and increase its value. Upping the Energy Performance Certificate (EPC) rating can also make it more attractive for property investors too. Every UK property is required to have an EPC if it’s being sold or rented, and currently landlords can only legally rent out properties with a minimum EPC rating of E or higher, however that is likely to rise to D or even C in the future, so many will be looking for properties with higher ratings to future-proof their assets.
Making a few relatively inexpensive changes such as adding loft insulation, draft proofing and energy efficient lighting might be enough to get you on to a higher band, but the biggest increases in value can be gained by upgrades to your boiler and central heating system and adding double or triple glazing. Some smart home technologies and solar panel installations may also improve your rating and add some value, but by how much can vary depending on its desirability in the location and property type.
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Increase living space
A sure-fire way to increase house value is to make the place bigger. There are various ways you can increase living space, ranging from building an annexe, extension or conservatory, to converting the loft, garage, or cellar. A surveyor providing a valuation will include all internal habitable space in their measurements, and the size of the building makes a big difference to its market value.
When building on or converting part of your property, always check with your local authority if you need planning permission. In most cases the work will at the least be subject to building regulations, and if it doesn’t meet the required specifications, instead of gaining value, the extra space could even have negatively affect the price it would fetch as it will cost money to remedy and some mortgage lenders won’t touch it.
Add a bedroom
A loft conversion will add a lot more value to the house if you’re not sacrificing another room for the staircase. Turning your home from a 2 bed to a 3 bed, or a 3 bed to a 4, can increase the value by 10-15%, depending on the demand in the area. Staircases and rooms specifications will need to comply with building regulations to be classified as an additional bedroom. Conversions without sign-off aren’t worth doing in my eyes. Otherwise estate agents will be stuck trying to sell its appeal under creative titles like a ‘play room’ or ‘study’ which a valuer isn’t going to add much on for. An alternative, cheaper way to add an extra bedroom is to make better use of existing space by adding or moving non-load-bearing walls to change the current layout.
Update the kitchen
The kitchen is the one area of the house that potential buyers always make a big deal over, so a great-looking kitchen goes a long way and makes a real difference to the resale price. A complete kitchen remodeling and fitting can be expensive, but you can still add a bit of value with a more modest spend by keeping the existing units and replacing the doors and worktops to give it a fresh, modern look.
You can also make your kitchen look great and add value by removing a non-structural wall to create an open plan kitchen-diner. This can often let in more light and make your house seem more spacious, even if it doesn't increase the ‘square footage’.
Update the bathroom (or add another one)
Another area buyers love to focus on is the bathroom (or bathrooms). If nothing else, it needs to look clean and hygienic, so replace the chipped, stained or colourful suite with a fresh white one and go for a tiled or vinyl floor. It’s a good idea to install a shower, as this ticks a box for a lot of buyers, but check your plumbing system pressure first to make sure the one you buy is fit for purpose so you don’t end up with a pathetic dribble.
Increase value even further by adding an en-suite to the master bedroom, or by adding a shower room or downstairs loo. Anyone who’s had to share a single bathroom with a full household can appreciate why this is high on buyer's wishlists. It can be excellent use of a small pocket of space, under the stairs or even between rooms by taking a little slice off each but it's cheaper and easier if you can locate it on the same side of your house as your drainage or soil pipe. For houses with four or more bedrooms, buyers expect there to be at least two bathrooms.
Add off-street parking
The amount of value that can be added through off-street parking is another one that varies depending on the demand in the area. If you live on a busy road, or near shops or a train station where you can’t guarantee you’ll always find a space in front of your house, off-street parking can be very desirable. Properties with a driveway or garage can often fetch between 5-10% more than those without. Be aware though, you’ll need to seek planning permission from the council for a garage, a dropped kerb, or to switch your garden from grass to concrete.
If there is local demand for flats, splitting titles on a suitable house to create two or more leasehold units that can be sold or rented individually is an expensive endeavour but can drastically increase the value of a property. Things to consider include the design and accessibility of each flat, as well as sound proofing and separation of heating and utilities, and you’ll definitely need to go through planning and building regulations.
Title splitting isn’t limited to the building itself. If your house is on a corner plot with a good size garden or you have other land within the boundaries of the property, you could apply to the Land Registry for a freehold title split and then either sell off the land separately or, if you can obtain planning, you could build another property on it!
Apply for planning
Believe it or not, you don’t actually need to make any physical changes to your house (or land) to increase its value. Simply obtaining planning permission can propel a property price upwards. Buyers can be put off if they aren't sure whether or not they will be allowed to make use of space in the way they would wish, so having consent to develop already in place demonstrates the property’s true potential and eliminates risk for those who are prepared to do the work themselves.
Do you agree with our list? What other tips do you have to increase the value of your property? Let us know in the comments below.