Falling house prices leave home improvers out of pocket

Homeowners who have chosen to improve, rather than move in the current market downturn, will be dismayed by new research from Abbey, which suggests that the cost of a home improvements is unlikely to be reflected in a sale price.

Falling house prices mean that previously profitable projects can now cost homeowners serious amounts of capital.

According to Abbey, an extension can leave a homeowner £20,000 out of pocket if they sell as soon as the work is completed, while fitting a new kitchen or adding a conservatory can set a property owner back almost £14,000.

The bank’s director of mortgages, Phil Cliff, points out that these types of improvements are important for those who want to live in the end result.

However, research suggests that 8.3 million homeowners will be carrying out improvements in the next 12 months and many will be expecting to add to the value of their properties.

The majority are focussed on upgrading kitchens and bathrooms: 3.2 million have plans to install a new kitchen and 2.4 million want to refresh their bathrooms.

When Abbey spoke to estate agents about the value of home improvements in today’s housing market, it found the only measures recommended by the profession were cosmetic, such as painting and decorating.

This type of work can apparently add up to £2,227 to the sale price of a property, over and above the cost of the project.

In recent years, first-time buyers keen to move up the property ladder have been the most active group home improvers.

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