4th November 2014
Conservatories are the home improvement that yields the best return on investment at 108%, new analysis has found.
A study by Zopa, the peer-to-peer lending platform, has revealed that the average cost of a new conservatory is £5,300, while the profit made on the value it adds to the property is typically £5,750.
Redoing the garden, was the next best-yielding improvement at 88%, with an average profit of £4,000 made on a typical investment of £4,550.
Updating a property’s exterior provides a typical return on investment of 75% as it costs an average £6,000 and returns £4,500 in profit.
The research found that the average home improvement adds 10% to the value of a home, based on home owner’s estimates, working out at just under £30,000, while the average return on investment was estimated to be 80%, based on the total amount spent by home owners.
The survey of households who have recently taken out a home improvement loan showed that bathroom renovation was the least cost-effective measure as it only provided a 48% return.
Kitchen renovations remain the most popular improvement, despite the fact they do not provide a great return on investment.
Eight out of ten home owners said that despite improving their homes, they were not planning on selling soon – suggesting that the current housing market is putting home owners off moving, and instead adapting their current homes to their situations.
Giles Andrews, co-founder and chief executive of Zopa, said: “With the latest housing market reports showing the market to be slowing down, home owners could add significant value by looking at ways to improve their current homes, rather than move.
“With record low rates on borrowing, home improvements can be a cost-effective way to add value to your property for the long-term.”
Which home improvements provide the best return on investment?
1. Conservatory, 108% return on investment.
Costs £5,300, profit £5,750
2. Garden, 88% return on investment
Costs £4,550, profit £4,000
3. Exterior refurbishment, 75% return on investment
Costs £6,000, profit £4,500
4. Extension, 71% return on investment
Costs £19,750, profit £14,000
5. Roof, 63% return on investment
Costs £4,150, profit £2,600
6. Carpets, 50% return on investment
Costs £4,000, profit £2,000
7. Loft, 50% return on investment
Costs £24,600, profit £12,000
8. Kitchen, 49% return on investment
Costs £9,600, profit £4,750
9. Bathroom, 48% return on investment
Costs £4,900, profit £2,350