Are renovations the doorway to profit?
Our study shows that homeowners believe by investing in décor and bigger renovation works they are adding value to their homes for future years
The latest research from Co-op Insurance has revealed that 91% of homeowners think their house value has increased since they bought it - by an average of £33,125.
The study which questioned 1,000 UK homeowners has found that 31% of homeowners bought their property with their eye firmly on how much money they could make from their investment. Of these, a reliance on house prices increasing generally was the main way (62%) homeowners were hoping this would happen.
Location was also a key deciding factor with over a third (34%) buying in an already desirable area whilst 32% of people did their research and sought out properties in areas classed as ‘up and coming’. Whilst 29% bought a home in clear need of renovation.
Changing rooms is a common theme, with 76% of homeowners in the UK making changes to their property since they moved in.
Of these, 60% believe the renovation works they’ve completed has led to an increase in value. On average, the renovation and decorative work that homeowners have invested in came to £18,224. This means that, on average, homeowners are seeing a £14,900 profit as a result of these works.
Homeowners in London have seen the biggest average rise in profit thanks to renovation and decorative works with 94% believing their property has increased in value by £21,499. However in Northern Ireland, despite 78% of people thinking their value has increased, it doesn’t look to be down to décor or renovation work, with an average loss of £205 being recorded when you compare spend on renovations versus potential value increases.
Kitchen is king when it comes to the rooms homeowners should renovate if they are looking to entice new buyers, with 56% believing it is this room that really sells a home. For a quarter of buyers, the living room is the second most desirable selling feature of a home. Bathrooms, whilst third on the list when it comes to saleability, are only important to 4% of homebuyers according to the research.
Over three quarters (76%) of homeowners have made changes to their homes since they bought them with décor being the most popular choice to spruce up a new pad (73%), followed by, the often more expensive, refitting kitchens (67%) and bathrooms (65%).
Caroline Hunter, Head of Home Insurance at Co-op, said: “Our study shows that homeowners believe by investing in décor and bigger renovation works they are adding value to their homes for future years.
Kitchens have long been lauded as the heart of the home and our study continues to solidify this, with over half of homeowners believing that this is the room of the house that could make, or break, a sale.
Whilst they are a big draw for prospective buyers, they can be expensive, therefore it’s important to revisit your home insurance policy to ensure you have the right level of cover in place during the building works, to protect you from additional risks during the work. Don’t assume your builder will have insurance in place that covers you in every eventuality.”