• Posted by Tuesday Nov 05, 2019

Home improvements as an investment: what's your ROI?

Home improvements can be expensive but the initial outlay can have many benefits. Homes can be improved in many ways from better energy efficiency and its part in carbon reduction to health and comfort benefits from heating and ventilation measures. Homes which have received sensible well-planned improvements will benefit from a better resale value, offsetting most or all of the initial costs.

Energy efficient homes


For both those looking to sell their homes to people wanting to cut down on bills, there are many things you can do to help with costs. If you’re looking to sell your home, consider your Energy Performance Certificate (EPC.) In today’s climate, a more energy-efficient home will fetch a higher sale value. And for private rental landlords, from April 2020 properties must achieve an EPC rating of E or above. In older properties, one of the many improvements to consider is insulation. The minimum recommended thickness nowadays is 300mm, compared to the old 100mm, it’s a huge jump, with a big impact.

As well as helping to retain heat, loft insulation can be part of an energy improvement plan. Glazing is a consideration when looking to improve the efficiency of your home. Research suggests that only 80% of homes have double or triple glazing, so if you haven’t yet, then it may be time to consider improved windows and doors to help with energy efficiency.

Generate your own electricity


Solar panels are a relatively non-invasive way that you can get payback from and can really boost the value of your home. Most solar panels come with a 25-year warranty, although some have a 20-year warranty, so always check with your installer. The payoff from solar panels is huge, and within a few years, you’ll have made your money back. This table below from greenmatch.co.uk shows the benefit.

Roof Space (square meter) System Size (kW) Estimated Cost (£) First Year Return (£) Profit After 20 Years (£)
8 m 2 1 kW £1,500-£3,000 £185 £640
14 m 2 2 kW 3,000-4,000£ £369 £3,800
21 m 2 3 kW £4,000-£6,000 £534 £5,630
28 m 2 4 kW £6,000-£8,000 £700 £6,750

It is worth bearing in mind that to fully reap the benefits of a solar panel installation you
should stay in the home for around five years before selling. Once you’ve finished the mortgage or the kids are at uni, it could be a great project to complete in order to get some financial relief in the long term.

The homeowner’s BIG project - kitchens and bathrooms


For many homeowners, the kitchen or bathroom is a big project that is never dealt with due to the cost and disruption caused. However, a new kitchen can have a huge impact to the aesthetic of a home. It’s the most popular renovation that homeowners take out loans or finance on, and you can see why.

Similarly, bathroom renovations are equally as popular. From extending the interior walls to adjusting the layout, tiling and fixtures a freshly fitted bathroom can have a significant impact on the value of your home. It may seem like a daunting project but with a 53% ROI it’s one worth considering.

Fix any structural problems


If you’re looking to sell your home, making sure that the bricks and mortar are sound is essential as some mortgage lenders may not lend on properties with major defects. As well as running the risk of your potential buyers having difficulty in securing funds, you could also lose plenty of potential buyers when the property is surveyed as defects raise red flags and a host of other potential problems. One of the biggest reasons for a sale to fall over is damp, but once identified it can be relatively easy to fix with the right builders and could put thousands on your house value.

Convert an unused element of your home


According to the Guardian an attic or loft conversion can add up to 20% to the value of the home. In bigger houses, it can be an extra two bedrooms or a master suite with its own private bathroom, which is suggested that could add up to £10,000 in value. It could also be an office space for a self-employed person or you could create a studio room to rent out for a lodger.

Garages also make for an excellent conversion opportunity, especially if they’re only being used for storage. Again, a self-sufficient studio is a great option to start earning a return on quickly. Alternatively, it could be turned into a utility room with built-in storage, a bathroom suite or something else, the possibilities are endless!

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