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Cash value of DIY projects declines

Homeowners gearing up for the DIY season have been warned that the cash value a home improvement will add to their property has generally dropped since last year.

More than half of homeowners (52%) are planning makeovers over the forthcoming bank holidays, such as redecorating rooms or laying new carpets, HSBC's annual Home Improvement Survey said.

But while this may improve the quality of life for those living there, the subdued property market as well as the increased cost of materials means that altering a home may not provide the same level of financial return seen in previous years, the study warned.

The only major home improvement work which has seen an increase in the return compared with the cost of investment is a new conservatory. The work will typically increase property values by £9,420, a 14% increase since 2011, property experts said.

As in 2011, a loft conversion remains the best way to improve a property's value, adding £16,152 on average in 2012 - although this figure is a drop of nearly a quarter (23%) on last year's study.

A room extension will add £15,665, a 3% year-on-year fall, while a new kitchen will boost the value of a home by £4,577, a decrease of nearly a fifth (19%) on last year. Re-carpeting a home will add £1,738 to a property's value, which is also a 19% drop on last year.

Valuation expert Paul Cutbill, of Countrywide Surveying Services, said: "Whilst sensibly improved and well presented homes will generally be attractive to potential purchasers, rising labour and material costs mean that the gap between the cost of improving and monies realised at the point of any sale have been reduced."

Some 1,369 homeowners took part in the study, as well as 112 estate agents who regularly value properties.

The study also found strong regional variations, estimating that a new kitchen will add £9,125 to the value of a home in London but less than half the amount (£4,300) in north east England and £2,333 in Scotland.

Peter Dockar, head of mortgages at HSBC, said: "Homeowners should think carefully about the type and extent of any home improvement works they are planning. Those which enhance quality of life while retaining broad appeal should be favoured over more individually styled alterations."

Source : MSN Money

27 March 2012
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