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Should you improve or move?

By Naomi Caine

The high price of moving is forcing many homeowners to stay put. They prefer to build rather than budge. And if they get it right, they can add thousands of pounds to the value of their home.

Stamp duty is often the biggest moving cost, but you
also have to add legal fees, removal charges and surveys - as well as the estate agent's commission. The average moving bill is about £12,500, according to the Woolwich, three times the figure in 2000.
Then there's the cost of trading up. Most people move house because they need more space. The typical three-bedroom home costs £162,000, but you would pay £196,000 for a four-bedroom property - a difference of £34,000.

No wonder more people are choosing to improve their property instead of move to a new one - more than half of homeowners, according to research from Abbey. Some 330,000 domestic planning applications were submitted between March 2004 and March 2005, almost double the number a decade ago.

If it's not a botch job, you should more than recoup the money spent on improvements when you eventually come to sell. So how do you make the most out of your existing home?

Extend the loft

A loft extension makes use of dead space and adds the most value to your home. Fionnuala Earley, group economist at Nationwide building society, reckons a decent loft conversion can add 20% to the price, if it incorporates an extra bedroom and bathroom. An extra bedroom can add 6% to the price of a property and an extra bathroom more than 5%.

But it depends on the area, so you should ask a few estate agents to value your home - and then check what they think it would be worth with the conversion. Agents tend to exaggerate, though. So don't get too carried away. Propertypriceadvice.co.uk, a website, also calculates how much improvements might be worth in your area.

Costs for the work vary. Loft conversions start at about £20,000, although the price can jump if the conversion is complicated. It typically takes about three months to convert a loft, so be prepared for some disruption to your daily life.

Get planning permission before you do anything. It should be a fairly straightforward process and the government wants it to be even simpler. Homeowners are to be given greater freedom to build extensions and make improvements to their property when changes to planning laws come into force next year. The new rules should make it easier for householders to put in rear dormer windows, convert garages, and build extensions, as well as install solar panels and wind turbines.

Dig down deep

If you can't go up into the loft, the only other way is down. Basement rooms are becoming increasingly popular, although experts warn against putting a bedroom in the basement. But it's often not as simple as converting a loft and you should expect the work to be costly and lengthy.

Orders at the London Basement Company doubled in 2005 - and had already doubled again in the first five months of this year. Prices start at about £80,000 for a standard Victorian terrace, up to £130,000 to dig out a new basement to run the full length of a property.

Granny in the garage

A cheaper alternative is to convert the garage. It typically costs between £10,000 and £30,000. Phil Bateman of the Garage Conversion Company says: "Most people want another bedroom. We're converting more and more detached garages into granny annexes."

The garden's got to go

The logical extension for many homeowners is to build on the back of the house to create a large kitchen with a dining area, even if it means sacrificing some of the garden. Again, the prices vary according to the type of extension and whether you are installing an extra bathroom. But you should probably budget for about £20,000.

Stick to the DIY rules

If you are planning to do the work yourself, make sure you are up to date with the latest regulations. Since January 2005, for example, anyone undertaking any electrical work in their own home - apart from simple jobs like changing a light fitting - must seek approval from their local authority. The council will then come out to inspect the work, and charge for the visit. The same applies to anyone who wants to replace a door or window or install a drainage pipe. If the work meets regulations, the local authority will then issue a certificate.

Replacement windows too must obey a series of regulations: they must offer adequate ventilation, incorporate glass which meets the latest insulation standards, and allow escape from a fire. Homeowners who fit windows themselves must pay around £60 to have them inspected, to ensure they conform to the regulations.

Tips for success


  • Experts offer some general tips to anyone who is thinking of improving rather than moving. First, make sure the work is of a high, professional standard.


  • Second, check that any extensions or improvements are appropriate to the house. If you install a £20,000 kitchen in a £150,000 house, you are unlikely to get all your money back when you sell.


  • Third, keep within the bounds of taste. Some home improvement enthusiasts are wiping thousands of pounds off the value of their properties with tasteless decorating and DIY. If you rip out period features and install modern UPVC windows, you could knock 10% off the value of your home, according to a survey by Direct Line Home Insurance. And gleaming wooden floorboards are no longer de rigueur, with budget versions thought to knock a further 2% off prices.


  • Finally, remember that the most important home improvement is beyond your control: you cannot move your house to a better area. And a house in the best neighborhood can command a price more than a third higher than a similar property in an average area.


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