Home improvements no longer make you money

Estate agents believe that the vast majority of home improvements are now unlikely to add more value to a property than the homeowner spends on the upgrade, according to new research from Abbey Mortgages.

For people looking to boost equity in their property to get a higher price when they come to sell, the only home improvements currently recommended by estate agents are cosmetic improvements such as repainting and decorating. These can be expected to add up to £2,227 over and above the cost of the home improvement.

Declining house prices mean that other, previously profitable improvements, such as extensions and new kitchens are now expected to result in negative "net value added" of between minus £13,806 and minus £20,232. That is they will cost more to implement than they will end up adding to the value of the home.

Despite this, Abbey Mortgages reveals that 8.3 million homeowners still plan to carry out some form of home improvement in the next 12 months, with 3.2 million planning to install a new kitchen, 2.4 million looking at a new bathroom and 1.9 million planning a conservatory or some other form of extension. A further 589,000 homeowners are planning to convert their loft or basement.

Abbey's research found that almost a third (30 per cent) of estate agents have changed their advice in the last 12 months when it comes to home improvements. Having previously advised homeowners that improvements such as new kitchens and bathrooms were worthwhile, they now believe homeowners are unlikely to recoup the money spent when their property sells. However, 11 per cent now believe home improvements are more important than previously, while 58 per cent have not changed their advice.

Phil Cliff, Director of Abbey Mortgages, commented: "Our research shows that very few home improvements will actually add more value than they cost to implement at the moment, so it's important that people are making these improvements because they want to live in the end result and aren't doing them in order to add value alone."

For those people who are looking to make home improvements and enjoy the benefits of them, Abbey offers a competitive range of additional loans.