New data from the Office for National Statistics could help homeowners predict how much value an extension would add to their property.
The ONS’ latest figures reveal changing property prices across England and Wales from 2004 to 2016. The data includes the average price of a property ‘per square meter’, which could be used to predict how much a home would be worth following an extension.
In terms of ‘house price per area’, the most valuable place to own property in the UK is the royal borough of Kensington and Chelsea, where houses and flats are worth around £19,439 per square meter.
Of the 20 most expensive UK boroughs, 19 are in London. Even properties in London’s least valuable area, Barking and Dagenham, are worth £3,994 per square meter: more than twice the value of properties in Manchester and Birmingham and £1,833 more valuable than those in Cardiff.
The cheapest properties can be found in Blaenau Gwent, Wales, at £777 per square meter. Wales overall had the second lowest value of the regions covered with just £1,408 per square meter, compared to £1,271 in the North East and £1,543 in the North West.
It is good news for those lucky enough to own a property: average prices per square meter rose by 28% in Wales over the last 12 years and 44% in England. Having said that, these growth figures underline a property market that is seeing fewer and fewer people able to afford homes.
This has led to an ‘improve, not move’ mentality for many. In a separate report by Plentific, Barking and Dagenham was found to be the UK’s biggest property renovation hotspot, with a 114% increase in the number of renovation applications in the last two years.
When planning an extension, it is important to estimate how much the project will add to the value of your property relative to the cost of the work. Unfortunately, doing so is not as simple as checking the stats for your own local borough.
For one, most residential areas in the UK have a ‘price ceiling’. This refers to how much a buyer will be willing to pay before looking for a property in a better area. In other words, there is a point where the value of a property can no longer increase, regardless of the amount of work done on it.
Secondly, an extension is not always guaranteed to increase a property’s value. Depending on the size of your property and the amount of available land, sacrificing part of the garden for the sake of adding a few square meters of living space could reduce the property’s appeal along with its value.
While extensions, conversions and other home improvement projects can add to a property’s value, this is not always guaranteed. The best thing to do if you are considering a major project will be to speak to an experienced local estate agent. They should be able to inform you about other properties in your area which have had work done, as well as how valuable the work proved to be in the long run. Be sure to pay special attention to the value of extensions based on type, as certain rooms can be much more valuable than others.
Most importantly, be sure to collect multiple quotes for the work from qualified local trade professionals. Depending on the state of your property, the cost of a major project could far outweigh the potential financial benefits.
Philip knows the most frustrating aspect of a home improvement job is not knowing anything about it! In the news, Phil is always on the look out for properties that inspire. He’s a fan of modern properties, with a particular soft spot for skyscrapers.