Additional accommodation = additional value
Increasing the accommodation through additional square footage and a ‘finished’, functional room certainly appears to be a way of achieving greater gains in value and resale potential. Whilst both surveys identify that this is particularly true for the majority of UK homes, in London particularly, where creating additional accommodation in an existing home can be a money-saver compared to the costs of selling, buying and moving home within the city, is growing in popularity.
Although loft conversions which include features such as en-suites have a well-earned reputation for adding luxury to a home, it’s fast becoming the norm that although luxury can also be achieved, it’s actually necessity for the space which is the main driver for having a loft conversion. In London properties particularly, creating space is often the cost-effective option for accommodating growing families, especially when factoring in the wish to retain proximity to an identified school or maintaining commutable travel links.
Paying out but cashing in
Working out the potential additional value a loft conversion could add to a home means looking at the basic numbers involved – property price without the loft extension, cost of the conversion and then property value with the additional accommodation:
1. It’s easy enough to get a free basic valuation from an Estate Agent or by researching similar properties in your area online.
2. The actual outlay for a loft conversion will vary depending on the roof space itself – shape and pitch, gable end or party walls, as well as any regulations which apply, such as covenants in the deeds or listed building or conservation area restrictions.
However, general pricing guidance can offer an idea of anticipated costs:
- A basic conversion to basic room costs around £15,000.
- A dormer conversion for double bedroom with ensuite is £35 – 40,000.
- Complex conversions which involve adapting the roof structure or ‘raising the roof’ can start from £40,000.
- Loft packages with a ready-made roof room which is built on costs around £55,000
3. Then adding the potential increase to the value, minus the possible outlay. So, taking a lower potential value increase of 20% (but remember the Abbey Loft survey showed up to 24.5% may be possible) and assuming an average house value of £300,000, this can mean an extra £60,000 value on a home which, even for spend of £40,000 for a high end conversion with ensuite, can mean not just gaining back the costs spent, but also a considerable additional profit on the space achieved.
Looking at London
With London property values, this of course could mean a considerable increase in potential value. A two bedroom house with a London average price £500,000 which achieves the additional 24.39% could create a 3 bedroomed home with an average value of £622,000 – meaning an additional £122,000 in value from a spend of up to £40,000.
The Abbey Lofts research article provides a go-to resource, particularly on properties in London boroughs, where increasing space and square footage with a loft conversion can not only be cheaper than moving, but can also result in premium property values when it does come to selling up. The research identified average value increases of over 20% across all London boroughs, based on conversion of two bedroom into a three bedroom home:
- North London average +24.77%
- South London average +23.86%
- East London average + 21.99%
- West London average + 27.75%
Whilst these are averages, which may of course be less or more depending on the actual London borough there is no doubt that a loft conversion can be a way to improve value as well as accommodation.
Finally, it’s also worth knowing that improving energy efficiency, one of the other top ways to increase the value of your home, can also be achieved as a happy benefit of a professional loft conversion. As energy saving materials such as insulation and double glazing can be used as part of the loft conversion itself, a professionally fitted loft conversion may help value and accommodation to increase, without increasing fuel bills or carbon footprint.