Are you worried about falling house prices? Here are some top tips on how to increase the value of your home.
This week, David Kuo's 2012 prediction is that house price-to-earnings ratio will improve for the first time since 1995.
In practical terms, this is good news if you're buying a home in 2012, as it should mean mortgages are a bit more affordable.
But what about selling your home in five years' time? If the slowdown in the housing market continues, this may become harder to do.
Using some of your increased wage packet to make your home more saleable should help you keep ahead of the game.
So, here's a quick guide to which alterations add the most value to your home.
1. Loft conversion + 21%
According to a study by Nationwide, a loft conversion is easily the single most valuable alteration you can make to your home.
By adding 300 square feet of floor space - and then incorporating an extra bedroom and bathroom - you could add over 20% to the value of your property. Starting with a house worth £200,000, this is a potential price increase of £42,000.
The estimated cost of this sort of conversion is just over £17,000 - a hefty sum, but very often a good-value investment.
2. Another bedroom + 12%
Just adding an extra bedroom can make your house price zoom up. Turn a two-bedroom house into a three-bed by adding a double bedroom, and you'll typically increase its value by 12%.
However, it's worth bearing in mind that this figure is based on increasing the amount of floor space available (by, for example, extending over the garage).
Fiddling about with existing floor space to produce the extra room generally adds less value - around 6% for the same sort of property.
3. Central heating + 6.8%
A big majority of UK homes now have central heating - and if yours doesn't, you're missing out on a big chunk (just under 7%) of added value. That makes a £200,000 house worth around £214,000.
The installation of a full gas heating system currently costs around £5,000 - so it definitely seems a cost-efficient investment to make. And of course, a newer, energy-efficient system can also save money on utility bills.
4. Parking + 6.5%
Simple but effective. Squeezing a parking space onto your property can add well over 6% to its value. Build a double garage and the value rockets by some 14.5%.
5. An extra bathroom + 5.2%
And finally, an extra bathroom can make a big difference. Although houses with two or more bathrooms have become more common in recent years, adding an extra one can still boost the price of a one bathroom property by over 5%.
Just make sure you plan carefully when you undertake all these home improvements.
According to a recent Halifax report, one in four major home improvement projects overshoot their budget each year.
Apparently, getting carried away with fixtures and fittings is the major source of increased costs, with kitchen makeovers the most likely to spiral out of financial control. So draw up a budget, then stick to it!
More: How Often Do House Prices Fall?
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