Loft conversions ‘can add nearly a quarter to value of typical property’

An extension or loft conversion could add as much as 24% to the value of a typical home, analysis by Nationwide Building Society suggests.

An extra bedroom can potentially add 13% to a typical property’s value while an extra bathroom may add 4%, the research indicates.

A survey for Nationwide indicated that kitchen and bathroom renovations were the most popular amongst homeowners who have made improvements to their properties in the past five years.

The society calculated that a 10% increase in the floor area of a typical home could potentially add 5% to its value.

Individual circumstances will vary and factors, such as the location of a home, wider housing market trends and the extra floor space gained by any extensions, will have a bearing on the value of a property.

Homeowners would also need to weigh up the cost of any renovation when considering how much value it may add.

Across all homeowners who had made renovations in the last five years, the average spend was around £52,000, rising to £97,000 among homeowners aged 25 to 34 – likely reflecting more substantial upgrades having been undertaken by the younger age group.

Andrew Harvey, Nationwide’s senior economist, said: “We’ve used our house price data to look at the factors that affect the values of homes as well as the potential to add value.

“While we can’t identify the value associated with kitchen and bathroom renovations, we are able to explore the impact of more substantial projects, particularly those which increase the size of the property.

“Location remains key to house values but other factors, such as the number of bedrooms, are also important to home buyers. Home improvements that increase the size of the property, such as an extension or loft conversion, remain a compelling way to add value.”

He added: “Homeowners that add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24% to the value of a three-bedroom, one-bathroom house.

“Our analysis suggests that, providing the room is useable, this can be a good way to increase the value of a property.”

The survey found that, among homeowners who have undertaken renovations in recent years, around a third (34%) made green improvements, with more than half (56%) in this group adding solar panels.

Mr Harvey added: “Younger homeowners appear to be most interested in greening their homes, with over two-thirds (69%) of those aged 25 to 34 who had renovated in the last five years making green improvements.

“Older homeowners (aged 55 or above) were least likely to have made green improvements (at 18%), with bathroom renovation being the most popular amongst this demographic (68% of those who had made improvements opted for this).

“Looking at other popular home improvements, 39% of homeowners who had renovated added an outbuilding, such as a shed or entertainment space, while 23% added a conservatory to their property. In terms of larger scale projects, 24% of those who had made improvements opted for a loft conversion, while 21% had a single-storey extension built.

“The most popular reason for renovating was to make the property look nicer (54% cited this as a reason) while 35% were looking to boost the value of their property, with the latter being the most important factor for younger homeowners.

“Thirty two per cent of those surveyed made improvements to modernise the property to make it habitable, while 26% were looking to add more space. Interestingly, just 7% were renovating in preparation for a sale.”

The survey also indicated most homeowners are pleased with the results, with just 4% regretting renovating their home.

The most common reasons given by homeowners for not being satisfied with work undertaken were costs being too high and the results not being what homeowners wanted.

The survey was carried out by Censuswide among 2,000 homeowners in October.

Mary-Lou Press, president of NAEA (National Association of Estate Agents) Propertymark, said homeowners need to consider regulations relating to loft conversions.

She added: “Additional considerations to be aware of also include if your property is listed or sits within a potential conservation area, so it is always vital to fully check with relevant planning departments before undertaking any alterations.”