Relaxed planning laws could boost property values
The Building Society is encouraging homeowners to take advantage of the government’s relaxed planning laws, which were announced yesterday.
For a limited time, property owners will be able to build much bigger extensions without planning permission than at present. The coalition said it wants to make it easier for tens of thousands of families and companies to expand their properties, giving a much-needed boost to the construction industry.
Nationwide has changed its mortgage proposition for further advances offering access to its full range of mortgage deals with a 0.10% discount for existing customers.
Further advance rates:
Nationwide’s house price index special report looked at the value of improvements made to an average three-bedroom house.
It found that creating an extra bathroom could add 6% to the value of the property, while another double bedroom could push up the value by 12%. Building an extension or loft-conversion to create a double bedroom and en-suite bathroom could add 23% to the value, while increasing floor space by 10% could add 5% to the average value.
The price for building an extension can cost, on average, around £1,000 per m2 or £23,000 for a single storey and £76,000 for a double storey.
Robert Gardner, Nationwide’s Chief Economist, said: “With housing market demand still very weak, increasing numbers of homeowners may opt to improve rather than move. Our research assesses the factors that affect the value of homes, and the potential to add value.
“Having more useable space is generally thought to be consistent with better quality accommodation and people are prepared to pay for it. A 10% increase in floor space, other things equal, adds 5% to the price of a typical house, while adding space equivalent to the size of a double bedroom to a two bedroom house can add around 12% to its value.
“A second bathroom is also a favourite with homeowners and our research shows that creating an additional bathroom can add 6% to the value of the average house. Homeowners that add a loft conversion or extension incorporating a double bedroom and a bathroom can add about 23% to the value of an existing three bedroom, one bathroom house.”
[Graph supplied by Nationwide]