Knowing what to invest in to increase your home’s value can be tricky. If you’re thinking about selling, you’ll likely want to know if there are any opportunities to optimize your home and property value before finding a broker and putting it on the market. Here’s our take on a few factors that can increase your capital gain when selling your London property.
What is capital gain?
Capital gain is an economic concept defined as the profit earned on the sale of an asset which has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares.
2022 London housing market:
As of June 2022, the average house price in the UK is £286,397, and the index stands at 150.21. Property prices have risen by 1.0% compared to the previous month and by 7.8% compared to the previous year. Data shows that Kensington and Chelsea are seeing the biggest annual increase, with property prices rising 13.8% to £1.74 million. So, how can you increase the value of your home and stand out from the competition as post-COVID lockdown demand rises?
Related Article: London Property Market in 2022
5 ways to increase your London property’s value in 2022:
Since capital gain is the profit earned on the sale of your property, let’s focus on a few ways you can increase the overall value of your London property over time. You’ll need to consider investing in some additions to your home that might not have existed before you moved in.
- Loft conversion. A loft conversion that adds a double bedroom and bathroom can add 20% to the value of a three-bedroom, one-bathroom house. With the average UK house price standing at £286,397 in June 2022, a loft conversion will average an increase in value of +/- £57,000. Adding additional living space with a separate entrance to your home can increase property value by an average of 10% in central London. If you already have the space to convert a portion of your home into a loft space, this is a costly, but worthwhile addition to your investment property.
- Upgrade your kitchen. Remodeling a kitchen is a lot of work. Most prospective homeowners do not want to assume the cost and responsibility of remodeling a kitchen when they move in. Having an open floor plan kitchen with natural light could be the defining characteristic of your home that will set your house apart from the competition.
* If now isn’t the time to remodel your kitchen, consider adding a new backsplash or window to brighten your kitchen and give your space a “facelift” without breaking the bank. - Create an open plan living room. A potentially cost-effective investment solution, depending on the structure of your home. Creating an open plan living room space adds dimension and a perceived increase in overall space. Open plan living rooms are modern and in high demand, and creating one can sometimes be as simple as knocking down a wall.
- Plant a garden. Garden space in London can be limited, so if you have outdoor space, it’s valuable to utilise it! Adding a garden will enhance your property’s aesthetic, providing beautiful greenspace to view from in or outside of the house.
- A fresh coat of paint. Perhaps the lowest-cost investment you can make in increasing your home’s market value. A fresh coat of paint on the outside of your house will make it feel like a brand new home! If you have a brick facade, consider having it professionally cleaned to remove any signs of aging.
Increasing the value of your home while you own it is integral when thinking about your profit at the time of selling. Since London’s real estate market is experiencing a period of increased demand, making some upgrades to your home will set it apart from the rest.
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