Major renovations can cost a small fortune, so before we start, we need to know that it's worth the effort. Any keen renovator needs to know that the changes will either add enough value to their property to make the cost worthwhile, or improve their quality of life enough over the years they are in the property to pay off. Fortunately, researchers have crunched the numbers.
The first part of the project, by Zopa, was to identify those improvements with the best return on investment. In other words, those that will pay off when you come to sell your house. It found that the most valuable change you can make is a loft conversion, which costs an average of £23,700 and produces a profit of £16,480 (once you subtract the cost of the improvements from the increase in the property price). That's a return on investment of 70%.
In second place was a wholesale redecoration of the property - which sees an average layout of £13,240 and an average profit of £8,180, and returns 62%. In third place was building an extension, which is the most expensive change at £30,240, but returns a profit of £17,090, so has a return of 57%. The rest of the top five is completed by a new bathroom - with a return of 53% and a kitchen at 51%.
Best for the homeowner
The second part of the study looked at the changes that brought the most joy for homeowners, and the results looked very different. The loft conversion was actually the least popular of the renovations - at 2% - a low point only otherwise achieved by adding a conservatory. Extensions were also unpopular - with homeowners only scoring it 5%.
The change that homeowners said would improve their life the most was a new kitchen - at 25%, followed by wholesale redecoration at 22% and a new bathroom at 12%. Even investing in windows and doors or the garden scored better than the extension.
What should you do?
The most effective renovations, therefore depend on what you actually plan to do. If you intend to stay put, then your priority has to be to improve the property for yourself - so decorating, installing a new kitchen and bathrooms - and possibly investing in windows and doors - makes sense.
For those who are keen to add value at the same time, the best balance appears to be in decorating, which adds value and improves life for homeowners. There's also scope for improving the kitchen. The return on investment for a brand new kitchen may not be as exciting as other changes, but you will usually cover your costs.
But what do you think? What improvements would most appeal to you? Let us know in the comments.
The ten most valuable home improvements
The ten most valuable home improvements
If you have the cash (and the planning permission) by far the best way to add value is to increase the floor space, by either converting the attic or extending into the garden. Work that adds an extra bedroom will typically add 12% to the value of the property, so a £20,000 outlay will easily add at least this much value.
If this is beyond your budget, you should focus on increasing the space through clever storage solutions. In a bedroom, for example, by investing in clever under-bed storage, adding high shelves, and investing in taller wardrobes, you can turn a cramped single room into a spacious one - or convert a single into a double.
This is a surprisingly cost-effective way to boost the value. Admittedly you'll have an outlay of anywhere between £5,000 and £30,000, but if you choose a style that complements the architecture of your home, match the flooring to the rest of the downstairs, and make sure the conservatory feels like part of the rest of the house, you can add 7% to the value of the property.
If you live in an area where parking is in high demand, then by turning the front garden into a drive you can add as much as £40,000 to the value of the property. You may need planning permission, and you will have to apply to the council to have the curb lowered, but the time and money will be repaid several times over. Rather than chucking down tarmac, it's worth looking at a garden that incorporates greenery, which will mean you're not contributing to the flood risks in the area.
If you are selling in the near future, this is important, because you need to entice people in. At the very least paint the front door and touch up painting on the windows. You should also fix any guttering and give it all a good clean. Your home should stand out for the right reasons.
This is where most people will spend a good chunk of their time at home, so not only will you add value, you'll also benefit from any changes most. If you can stretch to a new kitchen you could add 5% to the value of your property. However, if you don't have the thousands of pounds required for that kind of change, just by replacing the doors for something more modern, putting down stylish flooring, and investing in fashionable appliances, you can add significant value.
You don't need to spend much. If you already have serviceable white suite, you can add a chrome heated towel rail, glass screen instead of a shower curtain, new mirror, or even a power shower, and you can add value to the property without the disruption and expense of a new bathroom.
This isn't cheap, but if the house is short of bathrooms, building one can add 10% to the value of the home. Increasingly buyers will come to expect them, so you'll dramatically add to the number of potential buyers by being able to tick that box.
The Energy Saving Trust estimates that if you upgrade from an old gas heavyweight boiler to a new condenser boiler, someone living in the average three bed-room semi could save around £500 a year. The costs involved mean that it could take just over three years before you start seeing a financial return, but from then on you're in the money.
In a poorly insulated attic, around 30% of all the heat in your house is going straight upstairs to escape out of the roof. This simple DIY job will save you £200 a year or more on your heating bills - so will pay you back almost immediately.