For a short period of time, UK householders have the opportunity to increase the value of their house substantially by taking advantage of a government initiative to make it possible to build larger than normal extensions without the need to obtain planning permission. For a limited period of time, businesses will also be permitted to expand their premises substantially without first obtaining planning consent. The implications of this, so far as the effect in property values is concerned, should not be under estimated.
A recent study by the Nationwide Building Society found that householders could make real financial gains by extending their homes. Its research suggests that adding an extension to an average three-bedroom home in Great Britain could have the effect of increasing its value by approximately 23%. (This figure is based on the assumption that the extension would involve the addition of 30m2 of floor area and include the addition of a double bedroom and en-suite bathroom.)
Of course, the cost of an extension needs to be considered. Nationwide estimate the cost of a single storey extension to a house to be around £23,000. Nevertheless, the maths is pretty simple. If you have a house worth, say, £300,000, a single storey extension, costing £23,000 approx is likely to increase its value by around £69,000 – a net gain of £46,000! Two storey extensions will cost you more to construct, but the likely increase in property value will be greater.
And it is not only a complete extension that will increase the value of your house. The Nationwide study found that the mere addition of another double bedroom with a floor area of 13m2 could have the effect of increasing a house’s value by approaching 12%. Building an additional bathroom might add another 6% to a house’s value, while adding 10% to a property’s floor space can result in an addition of 5% to the average value!
When these figures are looked at in the context of the cost of up-sizing your house, it makes the choice of an extension all the more attractive. Not only will you have a more spacious house with additional amenities, you will have created an investment for your future!