Piggybank News

November 21, 2012

Add value to your property with an extension

Following the recent announcement of a 2yr relaxation to planning laws Nationwide issued a special report detailing the increase in value to houses following different types of improvement.

Commenting on the Special Report, Robert Gardner, Nationwide’s Chief Economist, said “With housing market demand still very weak, increasing numbers of homeowners may opt to improve rather than move. Our research assesses the factors that affect the value of homes, and the potential to add value.”

Nationwide’s House Price Index Special Report looked at the value of improvements made to an average three-bedroom house. Nationwide found:

  • Creating an extra bathroom could add 6% to the value
  • Adding another double bedroom can push up the value by 12%1
  • Building an extension or loft-conversion to create a double bedroom and en-suite bathroom could add 23%2 to the value
  • Increasing floor space by 10% can add 5% to the average value

For people living in more expensive parts of the UK,  where moving from a 3 bedroom to a 4 bedroom house is unaffordable, or for those currently struggling to sell, the idea of extending may well be the best solution for a growing family.  The government’s hope is that many householders will take advantage of this relaxation to extend their home and help inject some much needed cash into the economy in the process.

However, there has been some concern expressed in the media that Private Landlords will use this relaxation in the regulations to justify extending properties inappropriately for use as Houses in Multiple Occupation, especially in London.   UK Housing minister Gregg Shapps recently took part in a well publicised raid on one such property and the government has vowed to crack down on the development of  “shanties” or “beds in sheds”.

(Piggy says “Recent changes in the benefits system have led to an upsurge in demand for shared housing across the country and the reality is that most councils (including the London Boroughs and Milton Keynes) are reliant on the Private Rented Sector to help meet this demand. However there is a wealth of law surrounding the development and letting of shared houses (or HiMO’s) which means that the vast majority of landlords operating in this market are both educated and professional.  Unfortunately this reality is rarely presented, with the exposure of even a single rogue operator being used to imply failings across the entire business sector.  However, in times when the demand for rented property is on the increase and money in the government coffers is in short supply; perhaps the ethos of working together which is being promoted by organisations such as Milton Keynes Private Landlords Association offers a more useful approach.”)

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