Homeowners adding a loft conversion or extension with a large bedroom and bathroom could increase the value of their property by as much as 24%, according to research from Nationwide.
The analysis, based on Nationwide’s House Price Index data, found that extending a two-bedroom house to create an additional double bedroom can add 13% to its value, while expanding a three-bedroom home to four can raise the price by 10%.
Detached homes benefitted most, with a potential uplift of up to 17% when moving from two to three bedrooms.
Nationwide’s findings show that home improvements remain a popular investment. Over the past five years, 71% of homeowners who renovated carried out kitchen or bathroom upgrades, with 42% adding a bathroom or ensuite and 25% an additional toilet.
Around a third (34%) made green improvements, more than half of which involved solar panels.
Younger homeowners are leading the way on energy efficiency, with 69% of those aged 25 to 34 including green improvements in their renovation plans.
In contrast, just 18% of homeowners aged 55 or above had done so, favouring bathroom renovations instead.
Andrew Harvey, senior economist at Nationwide, said: “Home improvements that increase the size of a property, such as an extension or loft conversion, remain a compelling way to add value.
“A 10% increase in floor space adds around 5% to the value of a typical house, but our analysis suggests that it is additional bedrooms that are key to adding value.
“Homeowners that 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.”
Nationwide’s data also found that 39% of homeowners who renovated added an outbuilding such as a shed or garden room, while 23% built a conservatory.
The main motivations for renovating were to improve the look of a property (54%) and to increase its value (35%), while only 7% said they renovated to prepare a home for sale.
The average spend on home improvements was around £52,000, though younger homeowners spent significantly more at around £97,000 on average.
Only 4% of respondents said they regretted renovating, most commonly citing cost overruns or disappointing results.
Nationwide added that energy efficiency upgrades remain another way to add long-term value, with more than half (52%) of UK homes now rated EPC C or higher, up from 23% a decade ago.
