A loft conversion or extension can add the most value — but what offers the least?

contemporary two storey extension
An extension or loft conversion were found to be the best way to add value to your home in a Nationwide study (Image credit: Inna Kostukovsky)

Research into the home improvements that add the most value has revealed that an extra bathroom may be the least effective way of investing in a property.

Experts at Nationwide have dug into the best ways to increase your home’s asking price – with extensions and loft conversions topping the list.

If you are looking at building an extension you might want to look into these findings to add the most value to your home.

Loft conversions and extensions add as much as 25%

According to a study by Nationwide, home improvements like extensions and loft conversions can add 25% to your property’s value.

Andrew Harvey, Senior Economist for Nationwide, said they “remain a compelling way to add value” even more so than in 2016, the last time the company undertook the research.

He added: “Homeowners that add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 25% to the value of a three-bedroom, one bathroom house. This has increased from 22% in our 2016 research feature.”

Loft conversion costs can vary from around £18,000 to as high as £65,000. Costs will be significantly lower where you’ve got a suitably spacious loft to start with, and for simpler designs such as rooflight loft conversions.

Adding a bedroom adds 15% to the value

For most people, adding a bedroom without an extension or loft conversion is unrealistic, but for those with the floor space, a new bedroom adds around 15% to the property’s value.

A terraced house that is upgraded from two bedrooms to three can add 13% to its asking price and 10% if it goes from three bedrooms to four, while a semi-detached property will enjoy a 17% and 11% bump in the same circumstances. A two-bed detached property will add 13% with an extra bedroom, while three bedrooms to four increases value by 12%.

Ian Rock MRICS, author of the Haynes Home Extension Manual and director of rightsurvey.co.uk, says extension projects cost around £1,500- £2,000/m2 of new space. He said: “A ‘sticky note’ calculation of at least £2,000/m2 should give you a rough guide for build costs.”

However, that figure does not take into account the cost of design features and fixtures, and bear in mind extensions nearly always cost more than expected.

Harvey adds: “Having more useable space is generally thought to be consistent with better quality accommodation and people appear to be prepared to pay for it.

“Our analysis suggests that, providing the room is useable, adding an extra bedroom can be a good way to increase the value of a property.”

But adding a bathroom only increases the value by 6%

An extra bathroom may seem a sure fire way of adding value to a home, but Nationwide’s experts warn that it will add just 6% to the home’s value. Harvey said: “A second bathroom remains a favourite amongst homeowners and our research shows that an additional bathroom can add 6% to the value of the average house.”

Considering the cost of adding a new bathroom is the same as above – around £1,500-£2,250/m² of new internal space (excluding VAT) – you may want to reassess if it’s the right investment.

“Ultimately of course, the decision to invest in the home is an individual one, taking into account the costs and hassle involved, as well as potential benefits,” Harvey adds. “And, for some households, it’s a choice between move or improve.”

small bathroom with dark blue tiles and countertop basin

A new bathroom design may not be the best investment if you're looking to add the most value to your home (Image credit: BC Designs)

Making your home energy efficient is another way to make it more valuable

The Nationwide analysis also takes into account how energy-efficient technology like ground and  air source heat pumps, underfloor heating, solar PV panels, and insulation can add value to a property.

Harvey says: “Aside from extending, other ways of making your home more attractive include making it more energy efficient.

“Given cost of living pressures, energy costs remain a concern for households. Further, decarbonising and adapting the UK housing stock is critical if the UK is to meet its 2050 emissions targets, especially given the housing stock accounts for c20% of the UK’s total carbon emissions.”

Sam Webb

Sam is based in Coventry and has been a news reporter for nearly 20 years. His work has featured in the Mirror, The Sun, MailOnline, the Independent, and news outlets throughout the world.  As a copywriter, he has written for clients as diverse as Saint-Gobain, Michelin, Halfords Autocentre, Great British Heating, and Irwin Industrial Tools. During the pandemic, he converted a van into a mini-camper and is currently planning to convert his shed into an office and Star Wars shrine.