FOOL'S EYE VIEW
How To Add Value To Your Home

By David Kuo (TMFDragon)
September 19, 2002

Over two-thirds of homes in the UK are owner-occupied. That could perhaps help to explain why we spend vast amounts of our time and money on maintaining and renovating our houses. We hope that our efforts and endeavours will not only go to preserve the worth of our abodes but also help them to appreciate in value over time.

Television program producers have been quick to latch on to the mood of the nation for our almost insatiable demand for DIY project ideas. These programmes show us how, with the help of a few bits of fabric off-cuts and a couple of planks of MDF, and of course that trusty staple gun, we can transform our humble residence into something out of Ideal Homes - a la Lawrence Llewelyn Bowen. But will these alterations add value to our houses? Not necessarily. There are many things that we can do that might make our houses a bit easier to sell, but only a few things will add real value to them.

A lick of paint around the windowsills and a neatly manicured lawn might impress a prospective buyer. Your tastefully sponged walls and stylishly stenciled room dividers might even draw admiring oohs-and-aahs from friends and family. But they do not add value to your house. The same goes for that new fitted kitchen or bathroom suite that you have had your eyes on. This sort of renovation might make your house a more pleasant place to live, and they might even demonstrate the 'possibilities' to a purchaser, but unless they happen to be exactly what your purchaser wants, they'll just end up being redone and no value will be added for anyone.

So what does add value to your home?

With house prices in the UK edging ever higher, it quite noticeable that many properties are now being quoted on a "per square foot" basis rather than measured by the traditional "numbers of rooms". The price per square foot method of valuing properties is commonly used in Asian cities where land is at a premium where it can be much more practical to value residences based on the amount of usable space.

This could give a clue as to how properties might be valued in the UK in the future. For this reason a tastefully converted loft or the addition of a conservatory can help to increase the amount of usable space in a house and in turn its value to a buyer. The value of this additional space will also appreciate over time in line with property prices.

Extensions are also a good idea but this tends to be much more involved than simply converting a loft of tacking on a conservatory to the side of your house. Akin to the extension is a complete rethink of the layout of the rooms within the house. The amalgamation of two smaller rooms into one larger room can improve the use of space by creating a more open structure.

But whether it is a loft conversion, a full-blown extension or just redesigning a couple of rooms, it is always a good idea to consult an architect. Taking professional advice need not cost an arm and a leg but shopping around, as always, is advisable. As a general rule of thumb, the architect will charge 5% to 10% of the total building cost but this can be money well spent. Good architects come with a wealth of ideas and they will also be able to navigate you around the planning laws.

Architect fees are not an additional cost burden but a means of saving you both time and money in the long-term. There can also be a "snob value" attached to professional architect designs and this is often a good selling point when you decide to sell your house. But before agreeing to any professional advice always get a few quotes just to get a feel for the numbers. And when you meet the architect for the first time, ask to see some of his recent work.

There are also a number of other jobs around the house that will not need the specialised skills of an architect but will add value. These include the fitting of a central heating system, which is almost de rigeur for any house these days. Broken roof tiles should be replaced and broken windows should be repaired. These are all quick jobs that can be done and do not require planning consent or permission but are value enhancing.

So what doesn't add value to the house?

Almost any kind of interior design work will cost you money and that money will not be repaid to you when you eventually sell your house. This includes money spent on fitting carpets, laying parquet flooring, installing new electrical lighting, fitting a new bathroom suite and installing a new kitchen. If it's not what your purchaser wants, it'll just get ripped up.

Moving on to the outside of the house. A swimming pool might seem like a nice idea but, unless you get it absolutely right, it might not do you many favours. In some cases, the pool can even lower the price of your house. Potential buyers will have to balance the cost of upkeep, and perhaps the loss of a nice lawn, against the odd summer Sunday that it will be used over the year.

Paying for the work

It is always best, if possible, to pay for any work that needs to be done from your savings. Paying interest on loans will reduce any gains that you are likely to make when you eventually sell your house. But if the savings don't quite stretch that far, then a flexible loan or mortgage is the next best thing. Mortgage lenders are quite amenable to extending loans for the purpose of home improvements, but make sure that the loan you get is flexible so that you can pay off as much as you can as soon as you can.

More: The Fool's Homeowning Centre

This article was orginally published in October 2001.