13 Nov

Home improvements 'may boost investment yields'

Home improvements 'may boost investment yields'

Some home improvements can have a substantial impact on investment yields, according to a new index.

Lending firm Zopa has estimated that the average home improvement in the UK could add around ten per cent to the value of a property.

Using information gathered from those who have recently taken out a loan to improve their properties, the index concluded that adding a conservatory was worthwhile, with the average spend of £5,300 leading to a 108 per cent return.

The second most profitable option was garden improvements, with spending around £4,550 giving an 88 per cent return, followed by exterior work leading to a return of around 75 per cent.

Although extensions are often seen as the ideal way of boosting space and value, they tend to cost more to complete and offered a 71 per cent return on initial investment. Loft improvements were also less attractive to prospective buyers, with a return of 50 per cent.

Many homeowners opt to make changes to the kitchen and bathrooms in a house, but these improvements offered the least return rewards, with the latter offering just a 48 per cent return and updated kitchens returning around 49 per cent.

"With the latest housing market reports showing the market to be slowing down, homeowners could add significant value by looking at ways to improve their current homes, rather than move," said Zopa chief executive officer Giles Andrews.

He added: "With record low rates on borrowing, home improvements can be a cost-effective way to add value to your property for the long term."

The index also discovered that around 82 per cent of owners, despite making improvements to their properties, were not planning on selling in the near future. In fact, many were making changes to ensure they could delay moving and adapt their current home to meet their needs.ADNFCR-1222-ID-801759910-ADNFCR

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