Doing work to a property and weighing up the cost of renovation versus the result is a key consideration when investing in prime property in London. While there is great potential in the city’s older housing stock, you need to know how much value the most profitable home improvements will add.
In this guide we’ll look at some of the most profitable home improvements London property investors can make – and not just the usual suspects like loft conversions and kitchen refits.
Black Brick’s expertise as buying agents means we are in the perfect position to find prime London property that is ripe for renovation. We also have an enviable Black Book of trusted contacts, and we assist our clients in putting together the right team for any project, big or small. From planning consultants to architects, construction firms to interior designers and landscape gardeners, we know the best in the business. Understanding the costs and time involved in any project is crucial before making an offer on a property.
Energy efficiency impacts everything from sustainability and carbon footprints, to household utility bills, so it’s no surprise that nearly half (47%) of people surveyed by Barclays said they would pay more for property with energy efficiency measures already installed.
The bank’s survey listed four energy efficiency features:
With these four in place, the average buyer said they would pay 6% more on the asking price of a property.
Research by Hive found that energy efficiency improvements are among the most sought-after features by buyers, along with smart home technology systems:
Almost the entire top ten eco-friendly features included in Hive’s survey were desirable to more than half of the people surveyed – showing the wide appeal of these kinds of home improvements across the housing market.
Creating a sense of space is a great way to maximise home improvement profitability when renovating a property. A study by the HomeOwners Alliance (HOA) found that knocking out an internal wall and making an open-plan kitchen-diner space can add nearly £50,000 to a typical London property at a cost of just £3,500.
If you don’t want to disrupt the structure of your property and you have some outside space, consider building a garden room instead. This can add about £10,000 to an average London property but may avoid issues like planning permission under permitted development rights, depending on the size and location of the new structure.
Good-quality materials and modern fixtures and fittings can all help contribute towards the value of home improvements London prime property investors make to their homes.
The Hive survey found that over one in five would be willing to pay more for natural flooring materials like bamboo (22%) or reclaimed woodwork (21%), again tying into buyers’ search for sustainability and eco-friendly refurbishments.
A surprising way to add significant value could be to paint the house – not on the inside, but on the outside. HOA did some research and found that brightly coloured painted houses in London sell for well above those in neighbouring streets, a sign of the importance of local knowledge.
In one example, Kelly Street in Kentish Town – where a three-bedroom property is valued at about £1.3 million – has vibrantly coloured frontages, whereas neighbouring Castle Road with red brick houses has asking prices around £1 million for an equivalent home.
HOA noted the importance of using good-quality materials: “Trade-quality paint contains more pigment for enhanced colour retention and also offers superior protection against the elements, which is essential when buyers are looking for a home in a good state of repair.”
If you really want to maximise your home improvement profitability, you might want to push the ceiling price higher on the street by adding something unique or extravagant to your refurb.
Home gyms, cinema rooms and self-contained guest suites are all ways to do this, and your loft space could be the place to do it. Loft conversions can be some of the most profitable home improvements, but you don’t have to stop at just laying floorboards and drylining the space.
The Federation of Master Builders noted that loft space can be turned into an extra bedroom or home office, an upstairs lounge, a fitness studio, a creative space for artists or musicians, a home cinema or library, and many more possibilities to add character and unique appeal.
Finally, don’t forget the challenge of parking in London – or the potential to add value by giving buyers their own private off-road parking space. Always check for available parking before buying a property.
Direct Line found that just 18% of new-build property in London included a parking space in the asking price, compared with 67% in other UK cities. In Hammersmith, one new development only made parking spaces available to buyers of properties worth over £1.5 million.
In one example in Battersea, a £500,000 property was asking an extra £65,000 for a parking space – a 13% premium. Meanwhile in Chelsea, an £850,000 property demanded £75,000 for private parking, nearly 9% extra.
The ever-expanding London ULEZ might have you wondering whether a private EV charging point might be one of the most profitable home improvements in London – and Hive found that this could be the case.
Nearly two in five househunters (39%) said they would prioritise properties with an electric car charge point – far more than the percentage who actually drive electric cars, and a suggestion of the extra value in future-proofing properties.
Maximising home improvement profitability starts with finding prime property with potential at the right price. For help with your London prime property investment search, contact the expert buying agents at Black Brick today.
We would be delighted to hear from you to discuss your own property requirements. For a non-obligatory consultation, please contact us.
