With our homes doubling up as schools, offices and even gyms right now, it’s not surprising many of us will be considering adding a little more space in the new year. But how much could you actually earn from your investment? To give you an idea of how lucrative your next renovation could be, we’re running through one of the most profitable home improvements: adding an extra bedroom.
How much value does an extra bedroom add?
Although it varies from property to property, it’s said that adding an extra bedroom can add up to 15% to the value of your property. So, if your home is worth £200,000, you could instantly boost its value by up to £30,000.
What’s more, in a recent study by Rightmove, they revealed that more and more people are struggling to afford the next rung of the housing ladder due to increases in property values.
Two-bed flats have seen a price jump of 15%, while asking prices for three-bed houses have seen an increase of 20%. As such, in the North West you can expect to pay around £46,506 more for a three-bed house over a two-bed flat, whereas in the South East, you’d be looking at around £121,295 extra.
How much does it cost to add an extra bedroom?
Depending on the size of your property and the extent of the work required, creating an extra bedroom can cost anything between £15,000 – £40,000. If you’ve got the space, you may find you can add an extra bedroom by simply dividing one of your existing bedrooms into two. Although you won’t see such a big increase in value, you’ll probably find this type of renovation is a lot cheaper than a large-scale improvement project.
One of the most popular ways to add value to your home is by turning your loft space into an extra bedroom. Known to add a more significant amount to your property value, costs can vary depending on the amount of work required. A light roof conversion can bring back the best return as most of the structural work is already done. A mansard conversion however will require increasing the roof space, making it a bit more expensive.
Ways to finance your home improvement
If you don’t have spare cash in the bank to invest in your home, there are multiple finance options you can think about.
Personal home improvement loan
A personal home improvement loan is when you borrow the amount you need from a lender, and pay it back in monthly instalments, plus interest. Here at Aro, our lenders offer personal loans from £500 to £35,000 over terms from 1 to 7 years.
Secured home improvement loan
If you own your property, you also have the option of taking out a secured loan. A secured loan is a loan that is secured against your property. This means that if you are unable to repay your loan, your lender can repossess your property to recover their costs.
However, with a secured loan, you have more options available to you. Borrowing amounts range from £5,000 to £50,000+ and loan terms stretch up to 30 years.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
If you are over the age of 55, you may have the option to release equity from your home. You can release equity as a lump sum or in several smaller amounts. There are two equity release options: a lifetime mortgage or home reversion.
Want to find out your loan options for your next home improvement project? Check your eligibility now without harming your credit score.