"A 10% increase in floor space, all things equal, adds 5% to the price of a typical house. But our analysis suggests that it is additional bedrooms that are key to adding value"
- Andrew Harvey - Nationwide
New research from Nationwide highlights how specific home improvements can influence property prices in 2025. Analysis of Nationwide’s house price index (HPI) data shows that extensions or loft conversions with a bedroom can boost a property’s value by up to 24%.
Kitchen and bathroom renovations remain the most popular upgrades among homeowners over the last five years, while energy efficiency improvements are steadily gaining traction.
Andrew Harvey, Nationwide’s senior economist, commented on the findings: “Our recent research found that kitchen and bathroom renovations were the most popular amongst homeowners who have made improvements to their home in the last five years, with 71% undertaking either, or both, of these. More than two in five (42%) added a bathroom or an ensuite, whilst 25% added an additional toilet.
“Of those undertaking work, around a third (34%) made green improvements to their property, with over half of these (56%) adding solar panels. As we explored in our recent special report on the housing stock, solar panels are becoming an increasingly popular feature, with nearly 1.5 million dwellings in England having photovoltaic (PV) panels, equating to nearly 6% of total dwellings (up from less than 3% in 2013).
“Younger homeowners appear to be most interested in greening their homes, with over two-thirds (69%) of those aged 25 to 34 who had renovated in the last five years making green improvements. Older homeowners (those aged 55 or above) were least likely to have made green improvements (just 18%), with bathroom renovation being the most popular amongst this demographic (68% of those who had made improvements opted for this).
“Looking at other popular home improvements, 39% of homeowners who had renovated added an outbuilding, such as a shed or entertainment space, while 23% added a conservatory to their property. In terms of larger-scale projects, 24% of those who had made improvements opted for a loft conversion, while 21% had a single-storey extension built.
“The most popular reason for renovating was to make the property look nicer (54%), while 35% were looking to boost the value of their property, with the latter being the most important factor for younger homeowners. 32% of those surveyed made improvements to modernise the property to make it habitable, while 26% were looking to add more space. Interestingly, just 7% were renovating in preparation for a sale.
“Across all homeowners making renovations in the last five years, the average spend was around £52,000, although there was significant variation, reflecting the range of work completed. Younger households (aged 25-34) tended to have a much higher average spend (c£97,000), reflecting that this group are more likely to have made more substantial improvements. Amongst older age groups, average spending was lower, with only a small proportion (c10%) of homeowners completing a major project such as an extension in the last five years.”
Bedroom extensions drive value
Harvey added, “We’ve used our house price data to look at the factors that affect the values of homes as well as the potential to add value. While we can’t identify the value associated with kitchen and bathroom renovations, we are able to explore the impact of more substantial projects, particularly those which increase the size of the property.
“Location remains key to house values, but other factors, such as the number of bedrooms, are also important to homebuyers. Home improvements that increase the size of the property, such as an extension or loft conversion, remain a compelling way to add value.
“Having more usable space is generally thought to be consistent with better quality accommodation, and people are prepared to pay for it. A 10% increase in floor space, all things equal, adds 5% to the price of a typical house. But our analysis suggests that it is additional bedrooms that are key to adding value. For example, adding space to create an additional double bedroom can add 13% to the value of an existing two-bedroom house.
“Homeowners who add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24% to the value of a three-bedroom, one-bathroom house. Our analysis suggests that, providing the room is usable, this can be a good way to increase the value of a property.
“The table below shows the value added for different property types by increasing floor area to accommodate an extra bedroom:
Terraced: 2 bed to 3 bed 13%, 3 bed to 4 bed 10%
Semi-detached: 2 bed to 3 bed 14%, 3 bed to 4 bed 10%
Detached: 2 bed to 3 bed 17%, 3 bed to 4 bed 13%
“One of the questions homeowners may ask themselves before ringing the local builder is, ‘Do we really need the space?’ As we identified in our recent housing stock report, more than half (53%) of owner-occupied properties in England are classified as ‘under-occupier’, that is to say, they have two or more spare bedrooms."
“However, the increase in hybrid working means that some of these spare bedrooms are now more likely to be used as a home office or study. Additionally, many householders buy properties they intend to grow into over time, as their families expand and, probably more significantly, given demographic trends, people remain in properties after their children fly the nest.”
Energy efficiency adds value, too
“Aside from extending, another way to add value is to make your home more energy efficient. Given cost-of-living pressures in recent years, energy costs remain a concern for many. Furthermore, decarbonising and adapting the housing stock is critical if the UK is to meet its emissions targets, given that residential buildings account for 15% of the UK’s greenhouse gas emissions."
“Over the past ten years, energy efficiency has improved across the housing stock thanks to the higher efficiency ratings of newly built properties and improvements carried out on many existing homes, such as loft and cavity wall insulation. The latest data (2023) shows that over half (52%) of the housing stock is now rated ‘C’ or higher, up from less than a quarter (23%) in 2013."
“Ultimately, of course, the decision to invest in a home is an individual one, which has to take into account the costs, hassle and time involved, as well as potential benefits. However, our survey suggests that most are pleased with the results. Just 4% of those we surveyed regretted renovating their home. Amongst those that did, the most common reasons for doing so were that the costs were too much and/or that the end result wasn’t what they wanted (cited by 41%).”
