5 Ways to Increase The Value of Your Home
- 20th November 2018
- Posted by: Loanable
- Category: Resources
Many people want to get on the property ladder, and with the rising costs of properties, it is becoming more and more difficult.
It is thought that by 2025, more people will rent from private landlords than those who are buying their own home.
For many people saving up for the deposit is the difficult part of getting a mortgage. If you want to buy a £150,000 house, you may need £10,000 to £15,000 as a deposit. There are various schemes available to first-time home buyers, and to existing home owners, but you still need some part of a deposit.
Of course once you buy a house and get settled in, you want to make it your own, decorate it the way you want, and naturally over the years improve the property.
If you’re good at DIY, you can save yourself a lot of money by doing repairs and improvements yourself.
I am not that DIY friendly. I can paint, and do minor repairs, but you will not see me fitting a new kitchen or bathroom, or adding a conservatory, that is way outside my DIY skill level.
There are many things you can do to improve the value of your home. It is hoped that as you live in the house and pay the mortgage, the property will appreciate, or go up in value.
Property has always been seen as a good investment just for this reason, it increases in value.
As you improve the property, with various additions or decorations, this can also improve the value of a property.
Improvements and Council Taxes
Before we get into what you can do to improve the value of your home, and also what not to do, a couple of true stories.
The first story is about a gentlemen I knew many years ago. He was very house proud, inside and outside the house.
Over the years of living in his bungalow he planted some shrubbery, flowers, had the trees on the property professionally trimmed, and over a couple of years the outside of the house was very impressive.
The bushes were trimmed just right, the flowers would bloom each year and there would be various colours in the garden, it was a very nice looking house.
Back at that time the local council was giving out awards to some of the home owners for improving the look of their gardens and overall making the neighbourhood look better.
The council approached this gentlemen and said they were going to give him one such award, and they would put a small sign in his front garden which would announce he had won the award for improving the appearance of his house.
He refused the award, and wanted no sign placed in his garden.
When I asked him his reasoning behind refusing the award he stated, “I don’t want them to raise my rates”. He thought that the council may after giving him the award, place his house in a more expensive council tax band.
True story number two, involves myself as a mortgage loan officer as I granted mortgages to first-time home buyers and to existing home owners for remodelling and the such.
One loan I granted to a family to redo their house was called into question by the top manager of the mortgage company. He wanted to know why I had approved a loan of such an amount when by looking at the photos of the property in the valuation, the house was a shambles, and could not be worth near the loan amount.
I had to explain to my manager the loan was for improvements on the outside of the house, and then showed him photos of the inside of the house. The inside was a palace, beautifully decorated, very high-end expensive cabinets, solid wood flooring, bathroom fixtures of the highest specifications. The house was a show piece.
The owner kept the outside looking slightly shabby as to not draw attention to his home and possible thieves, in now looking to sell up, he wanted to finish the outside to the same high standard.
Funny what people will do to improve their homes, and also try to keep taxes down, and not draw attention to themselves.
All this is fine, until it comes time to sell, then you want the property to look as perfect as possible.
Home Improvements to Add Value
Sometimes it is the little things that can help improve the value of your home. Curb appeal is one of those things.
Making the outside of your home look nice, garden trimmed, flowers planted, maybe a hanging basket. Obviously keeping rubbish away and bins hidden as well.
When selling a property, these little things can make getting your asking price a little easier.
Keeping two rooms up to date is another way to add value. Those two rooms can be the most used in the house and they are the kitchen and the bathroom.
If you want to sell your house and prospective buyers see an old and antiquated kitchen or bathroom, they very well may calculate the cost to renovate these into what they may be willing to pay for the property.
Big jobs like loft conversions, and conservatories and extensions, can also add value, however, you need to be aware of how much extra value they will add against the costs.
If putting in a loft conversion is to cost you £20,000, and it adds 10% to the value of your home, is that 10% equal to £20,000.
What Not to Do
In short what not to do is to over-improve or over-develop the property.
Just as in the example about the loft conversion, if the improvement is not going to pay for itself, it may not be worth it. Of course over time as the house appreciates it may help, but you have to think about the big picture.
You need to research the average sale price of homes in your area, and also what improvements they may have done.
Adding an extension adds room and footage, and may add value, however, if you then want to sell the house and all the other house for sale in your area are selling for much less, you may not be able to ask the higher price you had wanted to receive.
Interesting Things That Can Improve Your Home's Value
There are some interesting things that can add value to your property, some of them out of your control.
Lloyds bank did some research and found that having a “well known” supermarket near you hone can add over £20,000 to the value, and if that supermarket happens to be a Waitrose, it may add over £40,000 to the value of your home.
The “Waitrose factor”. Which is now spilling over to having an Aldi or Lidl near your home adding value to it as well.
The name of your street can add value to your property as well.
The Chief Executive of estate agents HouseSimple.com, Alex Gosling said, “The name of your street could add thousands to the value of a property. You’ll probably pay more to live on a ‘Chase’ than on a ‘Terrace’ or ‘Close’. And regal-sounding streets – particularly if they have ‘King’ in the name – can bump up prices.”
Your property values can also be affected by any upmarket businesses that may be nearby.
The Managing Director of the National Association of Estate Agents, Mark Hayward said, “Aspirational amenities such as a Michelin-starred restaurant, organic farm shop or a local dining club can have a positive impact on the saleability of nearby homes. In addition, areas with high-value sporting and recreational activities like pony clubs and chess societies for children are also desirable, and when combined with successful local schools can see premiums on house prices of up to 10 per cent.”
“Parental competition is rife and many can regularly be seen battling to ‘keep up with the Joneses’ in order to provide the best possible upbringing for their children. This will in turn differentiate homes in certain areas from others on the market.”
Living near a sporting venue or having a pub within walking distance can add value to a home as well.
I have always advised not buying a property right across from a local pub, perhaps nearby, but not on the flight path of everyone entering or leaving. It can get noisy.
Many of these things that can increase the value of your property you may not have thought of. As we can see, there still is truth in the old saying, location, location, location.
Financing Home Improvements – Personal Loans for Homeowners
When looking at improvements or refurbishments to your property, which you may be having done to improve the property to sell, or just make it a better place to live, one question that will come up is, how do I afford these improvements?
As a homeowner you may have equity in your property, equity being the difference between the value of the home and the balance of the mortgage, if you still have one.
A home valued at £200,000, with a £100,000 mortgage balance is said to have £100,000 in equity. Equity/money that can be used to finance home improvement projects or refurbishments.
Personal loans for homeowners tend to have lower interest rates, and better terms, which means lower monthly payments, in part due to the loan being secured against the property.
These homeowner personal loans also allow you to borrow a higher amount, which may be needed to accomplish many of the improvements you wish to carry out.
Homeowner personal loans are one way to finance these improvements and refurbishments.
So what are a few if not five (5) ways to increase the value of your home?
Curb Appeal/Wow Factor: First impressions are important, and as we mentioned earlier, having that wow factor or curb appeal, can be done cheaply, and also increase the value of your home.
If your house looks great as soon as any prospective buyers pull-up to view it, chances are they may be willing to part with a little extra cash when purchasing it.
Things like not having rubbish bins in view, if you have a front garden having it trimmed and well presented. Any fencing or gates in good order and if need be freshly painted.
These things can be done on the cheap, but may return a few thousand extra in sales price to you.
Modernise: In particular, your kitchen and bathroom. Nothing can bring down the value of a property than by having an old fashioned kitchen and/or bathroom.
The cost of doing this can range from a few hundred pounds to update fixtures and the toilet, to over £4,000 for a whole new bathroom.
However, the expense can be outweighed by the fact the improvement does increase the value of your home, in addition, if you are trying to sell the property, a modern kitchen and bathroom increase your chances of a sale, and getting the price you are asking.
Loft Conversion: Here is an area where we need to weigh the costs, against any returns, or increase in value.
Loft conversions can add value to your home, but they can also be expensive. Some conversions can cost upwards of £20,000, and can be even higher.
If you plan on staying in the property and living there and need the additional space, the conversion is a well worth idea, as you get value out of the conversion while living there.
We will discuss this again, but we need to be aware of over-improving a property. If no houses in your area or neighbourhood have loft conversions, or other major renovations, by doing these it may be difficult to recoup the expense if you try to sell.
Extensions and Conservatories: These improvements to increase the value of your home fall into the loft conversion category. They can be expensive, and may not bring about as much in increase in the value of the property as their cost.
As previously mentioned, if the upgrades and renovations are to make life in the house better for you, the value is two-fold, you benefit from the renovations and they can also increase the value of the property.
Windows and Doors: This should almost be a no-brainer. Having double glazing and solid fitting doors add value, make life quieter, and also add to our next improvement to increase value, being eco-friendly.
Go Green and Eco-Friendly: Insulating your lofts, having double glazing, solid fitting doors, are all a part of reducing your home’s expenses for gas and electricity. Which saves you money, and also increases the property’s value.
Also having a well maintained and modern boiler also while an additional expense to change, saves you money in the long-run.
In some instances a modern, efficient, eco-friendly home can increase your home’s value by up to 6%.
As with many renovations to one’s property, you may require planning permission, and also need an architect’s plans, which can add to the expense, but when completed, add to your property’s value.