Home improvements 'may not add value'

An extension should boost the property's value

Home-owners planning to spend thousands of pounds improving their property may not get their money back when they move, a bank has warned.

For instance, while building an extension was likely to improve the value of a house significantly, installing a swimming pool would not, said Abbey National.

People wanting to increase the value of their home should stick to building conservatories and extensions, or carrying out loft conversions, it suggested.

People splashing out on a new kitchen, or installing central heating, were only likely to cover the cost of the improvement when they sold the property.

Adding value

Safe bets: Extension, loft conversion, conservatory

Neutral: New kitchen, central heating

Likely to cost: Swimming pool, garden landscaping

But home-owners putting in a swimming pool, landscaping the garden, or turning a bedroom into a bathroom were unlikely to even recover what they had spent.

However, even if improvements did not raise the price of a house they could still have benefits, Abbey National said.

For example, potential house-buyers might be put off a house which did not have central heating.

Home-owners were only likely to get about a third of their money back by installing double glazing - but they would save money on heating bills.

Installing a new kitchen should cover your costs

But the bank warned that replacing period windows on an old house with double glazing could reduce a property's value, as could knocking down walls to create more space.

A swimming pool might also put off potential buyers who have small children.

Bridget Walsh, head of mortgage marketing at Abbey National, said: "Rising equity levels have put us in the mood for reinvestment, but we do need to consider whether the improvements will actually increase the value of our properties.

"Spending thousands landscaping your garden may provide you with a pleasant view but it is unlikely to ever recoup the investment made."

The most popular home improvement, with 23% of those taking out a home improvement loan with Abbey National, was a new kitchen, followed by 21% who wanted to build an extension or conservatory.

But the cost of a swimming pool may not be recouped

Double glazing or new windows were popular with 18%, while 17% opted to landscape their gardens, and 8% installed central heating.

Five per cent of people planned to put in a new bathroom, the same percentage as those who planned to install a swimming pool, and 3% wanted the money to build a garage.

The research was based on 1,000 Abbey National Home Improvement loans from the first quarter of the year.