DIY fanatics warned as home improvement return on investment falls
With more than half of UK householders planning DIY projects over the forthcoming Bank Holidays, a new survey by HSBC has revealed that the potential increase in property value as a result of home improvements has dipped in the past year.
The annual HSBC Home Improvement Survey found that refitting or altering a home, although beneficial, may not provide the same level of financial return in today's market than may have been the case in previous years.
The survey found that 52% of house proud Brits plan to keep themselves busy making home improvements, including redecorating rooms and laying new carpet, during the Bank Holidays weekends in April, May and June.
Valuation experts deemed a loft conversion to be the best way to improve a property's value. The work will increase the value of a property by on average £16,152 - 23% less than in 2011. A room extension will add £15,665 (3% down), while a new kitchen will boost the value by £4,577 (19% down).
The only major home improvement work to increase the relative return-on-investment in the past year is a new conservatory. The work will increase property value by on average £9,420 - a 14% increase since 2011.
The survey also highlighted the regional variations of how home improvements can boost property value. A new kitchen in London will increase value by on average £9,125, compared with £4,300 in north-east England and £2,333 in Scotland.
Valuation expert Paul Cutbill, of Countrywide Surveying Services, said: ‘Whilst sensibly improved and well presented homes will generally be attractive to potential purchasers, rising labour and material costs mean that the gap between the cost of improving and monies realised at the point of any sale has been reduced.
‘Poor quality refitting and lack of proper design considerations, often as a result of inadequate project budgeting and planning, can also have a significant knock on effect to any added value which might be gained when selling a property.'
Peter Dockar, Head of Mortgages at HSBC, said: ‘Homeowners should think carefully about the type and extent of any home-improvement works they are planning.
'Those which enhance quality of life while retaining broad appeal should be favoured over more individually styled alterations.'