01 April 2016

What adds value to your home?

2 minute read


  • Many of us spend years trying to improve our homes, perhaps by extending them, refitting bathrooms and kitchens, or simply by giving them a decorative makeover
  • The biggest gains can be generated through adding a loft conversion or extension incorporating a double bedroom and a bathroom
  • Other ways of making your home more attractive include making it more energy efficient.

In his latest blog, Andrew Harvey looks at the value a range of home improvements can add to the price of a UK home.

Many of us spend years trying to improve our homes, perhaps by extending them, refitting bathrooms and kitchens, or simply by giving them a decorative makeover. Using our house price data we conducted some research to explore how much these changes can add to the value of a typical home, focusing in on the value created by adding extra bedrooms, bathrooms or an extension.

“Generally speaking, having more useable space equates to better quality accommodation - and UK homeowners are certainly prepared to pay for that space.”

As a rule of thumb, we found that a 10% increase in floor space adds about 5% to the price of a typical house. With that in mind, adding space equivalent to the size of a typical double bedroom to a two-bedroom house can add around 11% to its value.

We also found that a second bathroom - an increasingly popular feature - can put another 5% on the price tag of the average house.

But in many cases the biggest gains can be generated through adding a loft conversion or extension incorporating a double bedroom and a bathroom. This can add more than a fifth (20%) to the value of a three-bedroom, one bathroom house.

value added bar chart graph

Luxury or a necessity?

However, one of the questions homeowners may ask themselves before ringing the local builder is, “do we really need the space?” Data on how intensively owner-occupiers use their homes suggests the answer could very well be “no”. This is because 85% of owner-occupied properties in England have at least one spare bedroom1, with more than half (51%) classified as ‘under-occupied’, defined as having two or more spare bedrooms.

No doubt this reflects that many householders buy properties they intend to grow into over time as their families expand and (probably more significantly given demographic trends) people remain in properties after their children fly the nest.

However, this pattern amongst owner occupiers stands in stark contrast to the behaviour of renters, who appear far less willing to pay for space they don’t ‘need’ - in the private rental sector, just 13% of properties are ‘under-occupied’.

type of house and value added table

Aside from extending, other ways of making your home more attractive include making it more energy efficient. Ratings for homes go from A to G, with A being the most efficient. Since 1996, the proportion of owner occupied property rated A-D has increased from 20% to 71%.

energy efficiency bar chart

Also, increased use of insulation measures such as double glazing and cavity wall insulation have improved energy efficiency - since 1996, the proportion of dwellings with double glazing has increased from less than a third (30%) to more than eight in ten properties (81%).

% of dwellings graph

Ultimately of course, the decision to invest in the home is an individual one, taking into account the costs and hassle involved, as well as potential benefits. We would encourage all homeowners to think about their needs and requirements, as well as their financial circumstances, before leaping to any decision.



1Source: DCLG, English Housing Survey – Headline Report Tables (2013-14).

About the author

andrew-harvey

Andrew Harvey is a Senior Economic Analyst in Nationwide’s Economic & Market analysis team. His particular areas of expertise are the UK housing and mortgage markets and house prices.

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