15th February 2024
How to increase the value of a property
Whether your initial purchase decision was based on a goal of turning a profit, or just finding a home you love to live in, buying a property is an investment. How you choose to nurture and improve that investment is completely up to you, but if you want to increase the value of your property it pays to do your research before jumping into any renovations, big or small, to help turn a profit upon selling.
In this post, our property auction experts are on hand to guide you through how to increase the value of your property. Utilising our experience of auction trends, market awareness and research into the cost and worth of popular renovation projects, we’ve compiled a comprehensive guide which covers everything you need to know about what adds value to a house. We’ve also included the fundamental building blocks of how to work out whether or not a particular renovation is worth investing in so, if the project you have in mind isn’t covered, you’ll be able to calculate its worth by yourself.
How to increase the value of a property
The best way to increase the value of a property, whether you currently own it or are evaluating the potential value of a property you have your eye on, is to focus on projects which make meaningful improvements. There’s a big difference between adding value and increasing interest, and while smaller finishing touches can improve curb appeal and draw in more interested buyers, it’s the renovations like modernising features and extensions that will really drive up the price.
If your main purpose in carrying out these home improvements that increase value is to sell for a profit, rather than to enjoy the benefits as the main resident, your priority should be to add more value than the expenses of the project. We’ve included a handy calculation for working out the potential profits of renovating below to help make sure you get the best return on your investment:
Step 1*: Estimated new value = (Initial house price + value increase in percent)
Step 2**: Potential profit = Estimated new value – (Initial house price + cost of renovation)
*Step one shows the estimated new value of the property following the renovation work. This then needs to be inserted into the second step of the equation.
**Step two shows how much money (if any) you’ll make upon selling the property.
To provide an example of the above, if we take the current average value of property in the UK (£285,000), the average cost of a new kitchen (£17,500), and the average increase in value (+6% of initial property value) and insert it into the above equations, we get the following:
Step 1: Estimated new value = (Initial house price + value increase in percent)
Step 1: £302,100 = (£285,000 + 6%)
Step 2: Potential profit = Estimated new value – (Initial house price + cost of renovation)
Step 2: -£400 = £302,100 – (£285,000 + £17,500)
If the difference between the old house price and the new estimated value is bigger than the cost of the project, it’s likely that the investment won’t make a return and you’d be better off either not doing the renovation, or putting your improvements budget into something else.
What adds value to a house?
There is a wide range of renovations you can carry out to increase the value of a property, and these vary in time required, cost and space so that, even if you’re looking for a quick turn-around on a small budget, there’s still some opportunity for you to increase value.
Below, we’ve detailed the most popular home improvements that increase value. We’ve also done our research to show exactly how much you can expect to pay for these improvements, as well as what the potential payoff of each project would be, using the average UK house price as an example. If you’ve got a current estimated value for your property, or are looking to purchase a particular renovation lot, you can use the calculation above to estimate the potential value increases of each project.
How much value does a new kitchen add?
A new kitchen (not including a kitchen extension) can cost anywhere between £10-25K, with size variations and optional modernising extras like dishwashers and high-end appliances driving the average cost up. According to Check a Trade’s research, however, the average cost sits at £17,500.
When it comes to exactly how much this is worth, it’s estimated that a new kitchen can increase the value of your house by 5-6% of its original value. Taking the upper end of this estimate, and using the UK average house price of £285,000, this means that a new kitchen would increase the value of your home by £17,100, taking it up to £302,100. Therefore, you’d make a loss of £400 in this renovation.
How much does an extra bedroom add to home value?
A significant improvement to make, both in terms of cost and time required, adding an extension to make room for a new bedroom can significantly increase the asking price of the property. On average, an additional bedroom can increase the value by 14%, and if you also add an en-suite at the same time, this increases even further to 19%.
Of course, while an increase of almost 20% is impressive, this comes at a considerable cost, as the average single-storey extension (£41,500) with an en-suite (£6,500) comes to £48,000. In real terms, these averages mean that adding a £41,500 bedroom to a house will increase its value by £39,900 (which is a loss of £1,600) while adding a bedroom with an en-suite for £48,000 will increase the value by £54,150 (which is a profit of £6,150).
There is room for this to be cheaper depending on circumstances, as the range for a standard extension is between £16,000 – £67,000, while an en-suite can cost between £3,000 – £10,000, so if you’re able to secure a cheaper quote without sacrificing on build quality, your return will be stronger.
How much value does a conservatory add?
A popular type of extension that costs less than an additional bedroom, especially if you opt for the less expensive material of uPVC rather than wood, conservatories can add 5% to the value of your property. Homes with conservatories can also gain more buyer interest than those without, as many homebuyers have this addition as an essential on their hunting wishlist.
If you’re looking to add a conservatory to your property, costs will vary depending on what type you’re looking at, and what materials you’re considering for the project. The cheapest option of both is a lean-to conservatory made of uPVC, which will leave you looking at a cost of around £10,250. If the property’s initial value is £285,000, this could see you add an additional £14,250 to the value. With the costs of the project removed from this, your expected profit comes to £4,000.
How much does a new bathroom add to house value?
The second-most profit driving improvement you can make to your property from our list, replacing your bathroom and upgrading it to include the newest features can see you increase your home value by 4%. At the current average house price of £285,000, this is an increase of £11,400, which takes the total new potential value to £296,400.
The average cost of replacing the cost of a new bathroom is around £5,000, which means you could be making a potential profit upon selling of £6,400.
How much value do new windows add to a house?
Though new windows may not be the first thing that springs to mind when you think of home renovations, replacing old windows with new, double-glazed ones can improve your EPC score by 5-10 points. If this is enough to move your score up by one band, you could see a potential increase of 3%. After all, in the current financial market, where bills are increasing and people are looking for more ways to save money through energy efficiency, having a better EPC score makes a home more appealing.
In terms of cost, replacing the windows in your property is likely to cost around £4,250 and, if this adds 3% to the value of your property (which is £8,550 on the current UK average), you could potentially make a profit of £4,300 when selling. Compared to the time-intensive nature of some projects, such as extensions and conversions, replacing windows is also much faster, making it a great quick-win for those looking to sell faster.
How much does a garage add to house value?
An essential for many homeowners who need somewhere to keep their car overnight, or even as an additional space for hobbies, adding a garage to your property can increase its value by anywhere between 5-10%. This is an increase of £28,500 based on the UK average house price if the maximum 10% increase is made. As garages cost around £28,000 to build, this leaves an estimated profit margin of £500.
How much does a loft conversion add to the value of a house?
The most expensive project on our list, completing a loft conversion on your property could increase its value by a massive 25%. This is the biggest increase of any on our list, and it has the biggest potential profit to match. Following the calculations shown above, and with an average conversion cost of £50,000, you could see your value increase by £71,250. With costs removed, this gives a substantial profit of £21,350.
Of course, there are some drawbacks of loft conversions that should be taken into account by anyone considering this method of adding value to a home. In particular, these are typically very time-consuming projects, with an average project completion timeline of between 6-10 weeks. Beyond this, it’s also true that not every home will have suitable space to make this conversion, as only those with sufficient headroom and existing structure will be able to support a conversion.
What adds the most value to a property?
As the below table shows, the most value-adding project you can make on your home is a loft conversion, with adding a new bathroom also generating a good return once costs have been accounted for. Of course, it’s important to remember that these are calculated using averages only, and with sale prices constantly changing in line with demand and market conditions, renovations are never guaranteed to make a profit. As such, we always recommend making calculations specific to you, your property and your situation to get an accurate idea of worth as possible.
| Renovation | Average cost | Average value increase | Potential value minus cost (average UK property) |
| New kitchen | £17,500 | 5-6% | -£400 |
| Extra bedroom | £41,500 | 14% | -£1,600 |
| Extra bedroom with en-suite | £48,000 | 19% | +£6,150 |
| Conservatory | £10,250 | 5% | +£4,000 |
| New bathroom | £5,000 | 4% | +£6,400 |
| New windows | £4,250 | 3% | +£4,300 |
| New garage | £28,000 | 10% | +£500 |
| Loft conversion | £50,000 | 25% | +£21,350 |
Is it worth renovating a house before selling?
Contrary to what some people believe, you do NOT need to make any renovations to your property before selling. In fact, at SDL Property Auctions we don’t recommend making big changes to your property before selling, especially if it’s currently in a state of disrepair. This is because ‘problem properties’ are in high demand and competitive bidding can often help you achieve great prices at auction without the seller needing to change a thing.
This advice does of course depend on your seller position. If you’ve purchased a property for the sole purpose of renovating and reselling, make the most of your investment by focusing your improvements where they count the most, and avoid projects that are costly with little return.
Purchase renovation property at SDL Property Auctions
If you’re a developer looking for your next project to renovate, increase the value of, and resell, property auctions are the best place to look to secure a property with potential. At SDL Property Auctions, we regularly feature run-down properties which are ready to be transformed. Browse through the lots in our upcoming Auction Events, or click the button below to visit our property finder page to start your search.