27th July 2012
More than half of UK homeowners carried out home improvements last year but as prices for materials rise, the value recouped may only be a fraction of the cost.
With the recent downturn in the housing market many people have chosen to improve and not move and last year more than half of UK homeowners carried out some form of improvements.
But with the increase in VAT, the rising price of materials due to global demand and increased transportation costs, the cost of home improvements has increased and homeowners should make sure they're improving their home to live in and enjoy.
The cost of materials has increased significantly according to the Building Cost Information Service. Roofing costs have risen by 26%, plumbing and electric work by 22% and painting has risen by 17%, all outstripping inflation.
Recent research from HSBC suggests that several home improvements, which homeowners felt would increase the value of their home, added little or no value to their property. The research indicates that traditional home improvements such as redecorating, new carpeting and adding new bathrooms, often failed to increase a property's value by more than the cost of carrying out the work and in many cases added no value at all.
For example, 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.
"People continue to look to home improvements to add value, but carrying out any type of repair or renovation work on a property can be costly," says Martijn van der Heijden, head of secured lending at HSBC UK. "The value recouped may only represent a fraction of the cost. Therefore, 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 claim the two most valuable home improvements are loft conversions, adding on average £13,567, and room extensions, adding on average £13,285.
Last year homeowners spent an average £6,362 on home improvements. The most popular home improvement was painting and decorating (65%), followed by garden improvements (37%), new furnishings (31%), new carpets (22%) and new bathrooms (19%).
The most expensive home improvements were new kitchens costing on average £6,609 followed by new windows and double glazing at a cost of £3,646.
Home improvements that improve energy efficiency in the home have also become increasingly popular and are seen as offering the highest return on investment in terms of the amount they add to the home and the cost involved.
This type of improvement is also popular with potential buyers when you are selling your home. It was rated as the second most appealing home improvement: a new kitchen having the biggest appeal.
The kitchen and bathroom are also the rooms that homeowners would most like to see revamped.
Ways in which people fund their home improvements come from a variety of sources – from savings to credit cards, unsecured personal loans and further advances on your mortgage. It's always worth checking to see which type of funding is best for your own circumstances.
– Building Cost Information Service (BCIS) from the Royal Institution of Chartered Surveyors.
This article has been created for information use only and any data provided was correct at the time of publication. This article is not a substitute for professional advice; please seek guidance for any financial products from qualified person or company.
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HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people. In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.