What adds value to a house?

[Cheib]

Thinking forward I think there will in the future be a differentiation in house values based on how expensive they are to run in terms of utilities....clearly the bigger the house the more important this is. Electricity prices in particular in this country are only going one way because our coal fired and nuclear power stations are all coming off line in the next few years...forecast for electricity prices are eye watering.

We bought a house three months ago which we'll be doing a total refurb on in a year or so....I'll be investing money in good insualtion, efficient glazinz/heating systems etc The key here is not only do I think it adds value but it makes the house much cheaper to run in the meantime. I had a meeting through work with someone involved in renewable energy yesterday, he made the comment that the next gen PV (solar to you and me) due in 3 to 5 years will be a massive step change.

One thing I agree with that was said earlier is investing in the "intelligent home" will get you nowhere...the control systems that are genuinely integrated like Lutron, Control 4 etc are hideously expensive to buy, hideously expensive to run (you need to call out engineers to fix them/update them etc) and they date badly. In our old house we put a music distribution system in when we refurbed in 2006...the only thing still relevant from that system when we moved out was the speakers. Control systems (pre iPhone/iPad etc) were all way out of date. By all means invest in things like Cat5/6 but I wouldn't get too excited by the hardware.

[hardcastlephil]

FrankAbagnale said:

Welshbeef said:

Have asked a few different question here to date and this one consolidates everything.

Is there a ranking and % gain over the investment of any value add works done at a property

IE
Loft conversion
Rear ground floor extension
2 floor side extension
Log cabin

Etc.

I'd say it's relative to the house you're doing the works on. What sort of property, current accommodation, current size, location and size of plot etc.

On a £7m 7000sq/ft house, adding an extension might not add any value. But spending the money on an indoor pool/tennis court might.

On a chalet style house with plenty of ground floor accommodation but limited bedrooms/head height then working on the first floor to increase space would add value.

On a standard two bed terrace with a ground floor galley kitchen and bathroom at the back, 1 1st floor shower room or single story side extension to the kitchen to open it up would probably add the value.

There is a trend at the moment for open plan downstairs living space and I would think if the house doesn't currently have that then there could be a decent ROI if done properly. But again, it just depends on what you currently have.

So in summary, I don't think there is an answer tot he question which helps.

Exactly this - spent 10 years valuing for a EA and wouldn't believe or trust anyone who claims to work out value using a formula (unless new build apartments etc which are similar or in the same development). Identical houses next door can have drastically different 'value'.

I think you need to look at what the house lacks. As the other poster said; if little GF room, then an extension, if no garage, build one etc. It really depends on the house.

It's the old adage that a value is only what someone else will pay - this can work both ways and there are some funny people out there! I've seen buyers attach value to the most bizarre of features and pay what I would class as over the odds.

My other thought has always been about condition - it needs to be either a complete project, or ready to move into. Anything else and you are not reaching full potential. There's no point spending £30k on a loft conversion if the lounge smells of dog piss!

Phil

[Welshbeef]

What about Teslas home power generation station? Same size as a dishwasher means your totally off grid and can sell energy back to the grid.

When this comes out can see us seriously looking into it. Ditto next gen PV to go only log cabin roof which faces neighbour so no impact to us (and offer them power to their shed and garden lights as recompense + beer )

[Condi]

Welshbeef said:

What about Teslas home power generation station? Same size as a dishwasher means your totally off grid and can sell energy back to the grid.

Eye wateringly expensive.

For most it wouldnt have much, if any extra value, and certainly nowhere near the cost of the initial investment. A roof of solar panels might have some value, but its pretty easy to work out how much they are worth as they generate an income.

[Chrisgr31]

When assessing property for Council Tax the Valuation Office effectively work on a £ per sq ft (well metre actually) basis although it is slightly more complex than that and had a huge number of variables.

In the meantime, and as stated by at least one poster, a property is worth what someone will pay for it. Now you may be lucky and get a buyer that wants a log cabin, rear extension, side extension etc but they only need to £1 more than those that dont want those things. In reality of course they'll pay a small percentage extra over but not necessarily the full amount the works cost.

When buying a property people consider the value of that property and they consider that against comparables and those comparables are other properties on the market. Buyers will take factors like location, property size, property features, age, etc in to account. If you happen to won the largest house in a street then there is potentially a problem because it will be a higher prize than its neighbours and therefore buyers need to determine if space is worth it.

If you own the smallest house in a location then extending it up to the size of other houses in that location may make sense because people can see what the value of it is by comparing it with the neighbouring houses.

The reality though is that extending a property is not guaranteed to get you an equivalent return on your investment. It might work for developers but that is because they have chosen the house carefully, they know the market, they know what will sell, they will only build what will sell, and ultimately many get it wrong and go out of business, especially when the market turns.

As regards expensive kitchens and bathrooms I would say its not worth it. Buyers will just see a shiny kitchen/bathroom, they wont see that the best fittings have been used.

The best way to add value to a house is just to make it presentable, a coat of paint, new cheap carpet, emptying all the crap just makes the house look far better and enable people to imagine themselves living in it.

If you are buying a house with the intention of doing it up, extending it etc and selling it as a profit you need to do your research well at the beginning and check that a house with all the features you are planning would sell for the current price of the one you are considering plus the costs of the works.

[DanL]

p1esk said:

I've heard that if you're looking to sell your house, the value doesn't increase much by putting in a new kitchen and bathroom. The thinking was that many new owners will rip them out and have their own choice, so to a large extent it's money wasted for an existing owner to do it just before selling.

This is what my agent told me - sold quickly without the work (should be exchanging next week, all being well!). My bathroom was done when I moved in 7 years ago and still looks good IMO. Kitchen was left untouched - white units, but quite tired now, maybe 20 years old? Looks presentable in photos and in person, but needs a refresh. Was told it wasn't worth doing for the reason given above.

That being said, if the kitchen or bathroom look terrible then it could be worth doing, particularly if you're selling to a first time buyer who likely won't have money to make changes. Further up the chain that's less of a concern.

[eliot]

Welshbeef said:

Out of interest does it have official planning approval for the bedroom - if not then it's simply a log cabin which clearly you can use to sleep in but cannot sell it stating x bedrooms and include this.

No planning or building regs as habital space. It's just a garden office - but a very useful garden office nonetheless. We lived in it (family of four) whilst we rebuilt the main house.

The point being that such a thing adds no value according to the EA, despite being quite a useful and desirable thing to have.

So to the o/p - dont spend money on one with the expectation of increasing value - in reality it only adds to the desirability not the value. (same could be said for a conservatory to some extent)

[FrankAbagnale]

eliot said:

Had mine valued by an EA and they just multiplied the sq ft by a value.
I have fairly large log cabin with a shower and toilet, sleeping room and office space and they said it adds nothing to the value.

So the agent came round, measured every room and worked out the sq/ft of the property before giving you a value? Are you London based?

I'm intrigued as I have never heard of a high street agency value taking place with a formula like it. Also, I wonder what the "value" was in the formula and how it came about.

When someone asks how we arrive at a valuation, the answer is by comparable sales/properties (but there's also a bit of gut instinct in there too).

[northwest monkey]

The ceiling price is also incredibly important & the type of the property.

One of my rentals is a house in Peel Green in Manchester. Ceiling price of a tip-top property (traditional early 1900s 2-bed terrace) is about £110k. If my property is tip-top and is valued at £110k, adding a £20k pool in the back garden, or a £20k loft extension may improve desirability, but certainly wouldn't put the value up by £20k. Buyers in the area wouldn't expect and wouldn't pay for it.

There is no "formula" for adding value.

[Foppo]

northwest monkey said:

The ceiling price is also incredibly important & the type of the property.

One of my rentals is a house in Peel Green in Manchester. Ceiling price of a tip-top property (traditional early 1900s 2-bed terrace) is about £110k. If my property is tip-top and is valued at £110k, adding a £20k pool in the back garden, or a £20k loft extension may improve desirability, but certainly wouldn't put the value up by £20k. Buyers in the area wouldn't expect and wouldn't pay for it.

There is no "formula" for adding value.

Simple things like having a tidy garden.Outside paintwork or pvc in clean condition.That means also facia boards and guttering.Inside again clean no mucky carpets or like somebody mentioned smelling of dog or cat piss.Don't think it will add value just easier to sell to a buyer.The value to some people is what they are to prepare to do with the house if they like it.Living near good schools adds value or desirability also.

[eliot]

FrankAbagnale said:

So the agent came round, measured every room and worked out the sq/ft of the property before giving you a value? Are you London based?

Nope, Milton Keynes area. They had an idea of the value for the type and location and I knew the exact sq-ft because it was a self-build - so they just multiplied the sq-ft by £200 (two years ago) and that matched the sort of figure they (and I) had in mind. I never used to pay any attention to sq-ft until the last couple of years when I became more aware of it. Suffice to say I built the biggest thing I could reasonably get on my plot.

Here's an example that's down the road from me, it's 3316 sq-foot - which is £241 per sq-foot:
http://www.rightmove.co.uk/property-for-sale/prope...
(My house currently values at exactly the same price per sq-ft funnily enough)

Another one in my area:
http://www.rightmove.co.uk/property-for-sale/prope...
1489 sq-foot @ 380k = £255 sq-ft

Add sq-ft and you add value - conservatories, lodges etc don't add any value. Garage space doesn't count either (And I've got a triple garage!).
Note its more of a rule of thumb rather than a hard and fast calculation, they tend to use the sq-ft calc to prove or disprove the gut-feeling valuation.

Edited by eliot on Saturday 5th September 13:22

[Robertj21a]

Having bought a few houses over many years, I'd say that only a few things add value to any house - and some will devalue it.

In general terms I reckon significant value is added to a house if you add a bedroom (of a reasonable size), or a downstairs toilet, or a garage. Also central heating and double glazing if not already present. Otherwise, I reckon most other changes are a waste of money - new bathrooms or kitchens just get ripped out as few people really like the choice of others. Conservatories (and definitely log cabins!) are another waste of money.

[guindilias]

I always look to make sure there is a stream of water running through the basement, Welshbeef - and ideally the house would be owned by an imaginary "odd" uncle, and be virtually derelict.

[Welshbeef]

guindilias said:

I always look to make sure there is a stream of water running through the basement, Welshbeef - and ideally the house would be owned by an imaginary "odd" uncle, and be virtually derelict.

What are you on about - Uncle Arthur is in rude health thank you very much.



I'd recommend you stay off the vin rouge

[guindilias]

I recommend that you try heroin - wonderful stuff. Never found a wine to beat it.

[stewjohnst]

northwest monkey said:

The ceiling price is also incredibly important & the type of the property.

One of my rentals is a house in Peel Green in Manchester. Ceiling price of a tip-top property (traditional early 1900s 2-bed terrace) is about £110k. If my property is tip-top and is valued at £110k, adding a £20k pool in the back garden, or a £20k loft extension may improve desirability, but certainly wouldn't put the value up by £20k. Buyers in the area wouldn't expect and wouldn't pay for it.

There is no "formula" for adding value.

This more than anything is a factor. I happen to have a unique house for the area (it was a repo and needed serious work so I got it for not much more than a typical 3/4 bed in the area) but as a 6 bed detached with no other six beds in the area and no other listed buildings, the valuers never really know what to do with it come remortgage time.

For reference it's worth another £100k than when I bought it on paper but all the renovations were done by me from replumbing the central heating, updating the radiators, changing the plug sockets, light fittings, removing artex (after asbestos testing) , fitting a new kitchen plumbing a downstairs bog, etc... Kept tabs on the bills and spent about £60k to get it where it is.

Base of the revaluation was a well species bathroom and kitchen as ever.

[Spudler]

guindilias said:

I always look to make sure there is a stream of water running through the basement, Welshbeef - and ideally the house would be owned by an imaginary "odd" uncle, and be virtually derelict.

[guindilias]

Spudler said:

guindilias said:

I always look to make sure there is a stream of water running through the basement, Welshbeef - and ideally the house would be owned by an imaginary "odd" uncle, and be virtually derelict.

Really, you would also have no pictures of the house, except one which could have been taken of any given house in any given county. No interior pics, please, that detracts from the value.
Also, have a garden that is around a mile long, but 5 ft wide, at your own property.

[Renovation]

As others have said there is no magic formula.

I converted a traditional 3 bed to a 4 bed with ensuite - everyone agreed this should make money.

However I found that the buyers in the area either wanted tiny modern boxes which were typical in a different area or wanted larger rooms of a traditional house in my area.

Mine fell between the two and I ended up taking the only offer I received, which was priced as a 3 bed traditional.

You can't go far wrong with nice kitchens and bathrooms but you have to be aware what the market in that area wants - one size does not fit all.

[jason61c]

I don't see an 'efficient' house being worth more, nor having solar panels. Local estate agents say the. Add zero value and in some case s reduce value when fitted on anything but modern properties.

You can't go wrong with adding a garage, useable space like bedrooms or reception rooms, these things will be there forever, unlike the fads of home automation or the latest insulation.

people from renewable companies live to think they add value to a house.

I've a nice biomass system fitted, it pays 30k over 7 years, it doesn't add value but it might help against a like for like house in terms of saleability, it's not an ugly thing bolted to the roof either