How Does an Extension Impact the Resale Value of My Property?

by | Feb 26, 2024 | Uncategorized

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Are you thinking of adding an extension to your home? Whether you need more space, want to improve the functionality, or simply want to enhance the aesthetics of your property, an extension can be a great way to achieve your goals. But how will it affect the resale value of your property? Will you be able to regain the costs and make a profit when you sell your home? Or will you end up overcapitalising and losing money?

In this blog, we will explore the impact of an extension on the resale value of your property. We will look at the factors that influence the return on investment, the types of extensions that add the most value, and the best practices to follow when planning and executing an extension project. 

So, let’s get started!

What is an Extension, And Why Do People Do It?

An extension is a type of home improvement that involves adding extra space or rooms to an existing property. Extensions can be done in various ways, such as:

  • Building outwards: This involves extending the footprint of the property by adding more floor space on the same level or creating a new storey.
  • Building upwards: This involves adding a loft conversion or a dormer window to create more space in the roof area.
  • Building downwards: This involves digging out the basement or the ground floor to create more space below the existing level.

People do extensions for various reasons, such as:

  • To accommodate a growing family or changing needs
  • To increase the comfort and convenience of living in the property
  • To add features or facilities that enhance the lifestyle or functionality of the property
  • To improve the energy efficiency or sustainability of the property
  • To increase the curb appeal or attractiveness of the property
  • To increase the market value or resale potential of the property

How Does an Extension Impact the Resale Value of Your Property?

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An extension can have a positive or negative impact on the resale value of your property, depending on several factors. Some of the factors that influence the return on investment of an extension are:

Cost of extension

This includes the design, planning, materials, labour, and other expenses involved in the extension project. The cost of the extension should be proportionate to the value of the property and the expected increase in value. If the cost is too high, it may not be worth it in terms of the return on investment.

Quality of extension

This includes the workmanship, functionality, durability, and aesthetics of the extension. The quality of the extension should match or exceed the quality of the existing property and the standards of the local market. If it is poor, it may detract from the value of the property and the appeal to potential buyers.

Size of extension

This includes the amount of space or rooms added to the property and the impact on the overall layout and flow of the property. The size of the extension should be appropriate for the size and style of the property and the needs and preferences of the target market. 

If the extension is too small, it may not add much value to the property and may be seen as a waste of space. If it is too large, it may make the property look unbalanced or overcrowded and may reduce the value of the land or garden area.

Type of extension

This includes the purpose, function, and design of the extension and how it complements or contrasts with the existing property and the neighbourhood. The type of the extension should suit the character and architecture of the property and the demand and expectations of the local market. 

If the extension is irrelevant, outdated, or incompatible with the property or the area, it may lower the value of the property and the interest of potential buyers.

What Types of Extensions Add the Most Value to Your Property?

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Some types of extensions that add the most value to your property are:

Kitchen extensions

A kitchen extension can add up to 15% to the value of your property, as the kitchen is often considered the heart of the home and a key selling point for buyers. It can create more space, light, and functionality in the kitchen area and make it more modern, stylish, and user-friendly.

Bathroom extensions

A bathroom extension can add up to 10% to the value of your property, as the bathroom is another important feature that buyers look for in a property. It can create more space, comfort, and luxury in the bathroom area and make it more attractive, efficient, and hygienic.

Bedroom extensions

A bedroom extension can add up to 10% to the value of your property, as the number and size of bedrooms are crucial factors that determine the value and demand of a property. It can create more space, privacy, and storage in the bedroom area and make it more cosy, relaxing, and personalised.

Living room extensions

A living room extension can add up to 8% to the value of your property, as the living room is the main social and entertainment area of the home and a focal point for buyers. It can create more space, light, and versatility in the living room area and make it more spacious, inviting, and adaptable.

Conservatory extensions

A conservatory extension can add up to 7% to the value of your property, as a conservatory is a popular and desirable addition that can enhance the indoor-outdoor connection and the natural beauty of the property. It can create more space, light, and warmth in the property and make it more bright, airy, and pleasant.

What are the Best Practices When Planning and Executing an Extension Project?

If you want to maximise the value and success of your extension project, you should follow some best practices, such as:

Do your research

Before you start your extension project, you should do some research on the local market, the planning regulations, the costs and benefits, and the potential risks and challenges of your extension project. You should also look at some examples and inspirations of similar or successful extension projects and learn from them.

Hire a professional

Unless you are a skilled and experienced DIYer, you should hire a professional to help you with your extension project. A professional can provide you with expert advice, guidance, and assistance throughout the process and ensure that your extension project is done to a high standard and in compliance with the rules and regulations.

Choose a reputable contractor

If you decide to hire a contractor to do your extension project, you should choose a reputable and reliable one. You should check their credentials, references, portfolio, and reviews and make sure that they have the necessary skills, experience, and equipment to do your extension project. 

You should also get a written contract that outlines the scope, timeline, budget, and expectations of your extension project and protects your rights and interests.

Plan ahead

Before you start your extension project, you should have a clear and realistic plan that covers all the aspects and details of your extension project. You should have a clear vision and goal for your extension project and how it will improve your property and your lifestyle. You should also have a clear budget and schedule for your extension project and how you will manage and monitor it.

Communicate effectively

During your extension project, you should communicate effectively with all the parties involved, such as your contractor, your neighbours, your family, and your local authority. You should keep them informed and updated on the progress and status of your extension project and address any issues or concerns that may arise. 

You should also seek and provide feedback and suggestions to improve your extension project and ensure that it meets your expectations and satisfaction.

Conclusion

An extension can have a significant impact on the resale value of your property, depending on how you plan and execute it. It can add value, space, and functionality to your property and make it more appealing and attractive to potential buyers. However, if not done in the right way, it can reduce the value, balance, and charm of your property, making it less desirable and competitive in the market.

So, if you want to learn more about the impact of an extension on the resale value of your property or how we can help you with your project, please contact us today. We are happy to answer any questions you may have and provide you with a free quote and consultation. We look forward to hearing from you and helping you with your extension project.

FAQs

Does adding a bathroom increase a home’s resale value?

Adding a bathroom can increase resale value if the home lacks sufficient bathrooms for its size, but the return on investment varies greatly. Consider the necessity based on the number of bedrooms and overall layout​​.

How does the condition of a home affect its resale value?

The overall condition of a home significantly impacts its resale value, with well-maintained homes seeing better valuation adjustments than those focusing solely on age. Keeping a home in top condition can make a substantial difference​​.

What factors indicate a home has good resale value?

Key indicators of good resale value include a desirable location, proximity to well-regarded schools, curb appeal, a versatile floor plan, and a strong neighbourhood reputation​​.

How do foundation issues affect resale value?

Foundation issues can reduce a home’s value by 10-15%, with the extent depending on repair costs, the impact on curb appeal, and the cost of addressing secondary problems caused by foundation damage​​.

Do light fixtures add value to a home?

Updating light fixtures can add value and appeal to your home, especially if you choose modern, energy-efficient options. While the exact increase in home value is hard to quantify, improved lighting can make a home more attractive to potential buyers​​.

Are energy-efficient upgrades worth it for resale?

Energy-efficient upgrades can increase a home’s resale value, with buyers willing to pay more for homes with green features. The value added depends on the location, the upgrades made, and how the home is marketed at sale time​​.