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British homeowners who have made renovations attribute a price tag of £71,621 to create their dream home, according to new research from online savings provider GE Capital Direct. With the current housing shortage putting people off from moving, three in five (60%) say they are instead focusing on their own property to achieve their ideal home.
The good news is that most people vastly underestimate the value these home improvements add, according to property experts who estimate an average return of 125% across the most popular home improvements in Britain. Where properties were once viewed as vehicles for short-term investment, homeowners are now putting down roots to make a long-term home for their families.
The Great Home Improvements research reveals that a garden makeover has the potential to add the most value. With homeowners spending an average of £2,743 on garden renovations and estate agents valuing this improvement at £9,498, people can see a potential 246% return on initial costs. In addition, homeowners who install a brand new central heating system or consider re-vamping the bathroom may see similar returns on costs, at 238% and 210% respectively.
Despite loft conversions being held as the gold standard in home renovations to add both space and value, the research found that this extra room delivers the least in terms of return on investment.
Home improvements which add the most value are a garden makeover, new central heating, a new bathroom and kitchen redesign.
Improving personal comfort (64%), to feel house proud (43%) and to increase the value of homes (40%) are the top three reasons for people to make home improvements. In the attempt to create a dream home, over two in five (43%) have savings set aside for home improvements. For those saving for renovations, the study finds that people save on average £5,055 a year. This figure increases to £6,348 a year for homeowners in London. Despite this, the research found that nearly two-thirds (64%) say they are not saving as much as they would like to towards home renovations.
The upcoming three per cent increase in Stamp Duty has also dampened the desire to own a second-home. A third (32%) say the increase is encouraging them to focus on home improvements instead, with the figure increasing to over 50% for homeowners in the capital.
Commenting on the findings, Julie Edwards, Head of Savings at GE Capital Direct said "For many homeowners, the start of spring can trigger the desire to tackle home improvement projects. As well as enhancing day-to-day living, the right renovations can help to boost the value of your home. Careful planning, with achievable targets, supported by a regular savings habit can make creating a dream home achievable."
Interior designer and GE Capital Direct ambassador, Julia Kendell adds "There's no doubt that undertaking home renovations is sensible; not just for the increase in value and appeal to your property that can be achieved, but also the uplift in function and enjoyment. A well-designed home can make a significant positive impact to your quality of life. From having enough space for friends and family to socialise and stay, to ensuring everything has a place and is well organised, emotionally connecting to your home is vital to support and energise you in everyday life."
Julia Kendell reveals her top tips for homeowners thinking of making home improvements:
1. Plan your project with a realistic budget in mind - There is little point rushing in to a home renovation project without adequate funds as a half-hearted attempt is rarely successful and an unfinished project is grim to live with. Plan the project thoroughly with a realistic budget in mind and save regularly until you can tackle the whole job without stress. Being able to pay for the entire project before embarking on it will put you in a better position to negotiate with suppliers and trades.
2. Decide on the overall look and feel you want to achieve - Plan the space carefully and consider every last detail to avoid making unnecessary mistakes. Create a mood board to try ideas first and produce a scheme that is well balanced and create the overall look and feel you wish to achieve before committing to any purchases.
3. Create impact in your living space - The best home renovations improve your life as well as the property. Assess the areas where improvements will have the most impact for you and your family when creating your dream home.
Kate Gomes, 34 is a communications consultant in London. She lives with her husband in Wandsworth. For her first project on the home, she had her bathroom and toilet knocked together and updated. In total, Kate spent under £10,000 for the works and estimates that the renovation adds an extra £15,000 to her home.
"We bought the property in 2011 and it was due for a much-needed repair. Plus we wanted to improve the overall comfort of our home, modernise it, and make it more "us". We are both in the habit of putting aside some money every month, so when we need money for our home or other activities we can draw from this pot without any stress. Over the past few years we have done quite a bit to our house and our bathroom and toilet is the last piece. Now the space is much larger and brighter. The works are pretty much finished so the rest of the home just requires smaller updates like a fresh coat of paint on the walls."
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