Many home improvements fail to make financial sense

Several home improvements, which many homeowners maybe considering to increase the value of their home, add little or no value to their property, suggests research commissioned by HSBC.

The research, which questioned property valuation experts from across the UK, indicates that traditional home improvements such as redecorating, new carpeting and even adding new bathrooms, often fails to increase a property's value by more than the cost of carrying out the work and in many cases adds no value at all.

Homeowners may be keen to change their old carpets, but it is unlikely to improve the value of their home by more than the cost of the carpet, adding on average just £1,273. More worryingly, almost half (49 per cent) of valuers felt that re-carpeting a home would not add any value at all.

Martijn van der Heijden, head of secured lending at HSBC commented: "Today's challenging housing market is making valuers reconsider previously held assumptions of what home improvements actually add in terms of value. As such, homeowners looking to improve their home, should do so first and foremost to live in and enjoy, rather than for any uncertain increase in value."

Valuation experts claimed the two most valuable home improvements are loft conversions adding £13,567 and room extensions adding £13,285, both on average across the UK.

The research also highlighted simple cost effective actions homeowners can take to add value to their properties in the run up to a sale or increase the chance of selling. Crucially, 61 per cent of property valuers agreed that the number one way to increase a property's chance of selling quickly, and for a healthy price, was to de-clutter, moving excess possessions and furniture into storage. Valuers stressed the impression of addition space this creates is key to making an impact on potential buyers.

Similarly the research dispelled some widely held home selling misconceptions such as having the aroma of freshly brewed coffee or cut flowers to welcome prospective buyers. Over 40% of homeowners thought buying flowers and brewing coffee would be worthwhile, whereas only 9 per cent of experts thought they made any difference at all, and none considered them their number one tip.

HSBC has allocated £15 billion for mortgage lending in 2009 and has a broad range of best buy mortgages, for both remortgage and new homeowners, up to 90 per cent LTV.

HSBC was recently named the most competitive mortgage lender of 2008 as the bank's mortgages appeared as ‘Best Buys' more often than any other lender. In addition, Defaqto named First Direct (part of the HSBC Group) and HSBC as first and third respectively for having the lowest standard variable rates during 2008.