Moving home has always been an expensive business. Not only do you need to fund any difference in property value if you are moving up, but you will also need to foot the bill for a solicitor and moving costs such as estate agent’s fees, advertising and removals.
On top of this, however, there’s tax.
While a property transaction tax has always been payable above a certain threshold of value, the amount in cash that you now need to hand over to the taxman in Land and Buildings Transaction Tax (LBTT), if the home you buy is priced above £325,000, is 10 per cent of the value above the threshold.
The rise, brought in last year, has had a profound effect, with reports that sales at the top end of the market are slow as a result.
Homeowners are increasingly choosing to improve rather than move to achieve extra space and certainly if you like your home, your area and your neighbours, staying put and extending or changing the layout could prove a cost-effective alternative to swapping properties altogether.
Get it right, and you should end up with a home that meets your requirements that has also gone up in value.
But get it wrong, and you could end up with out-of-control costs and a home that’s worth less than when you started.
Easy and relatively cheap ways to increase space and bolster your home’s value include converting existing loft or cellar space into a usable room.
Putting in a new bathroom is also a good way to add value but, again, only if your home requires it. Converting a bedroom into a bathroom may suit your purposes – perhaps after the children have left home – but it is unlikely to have an upward effect on the value.
Common mistakes also include adding half-hearted conservatories that do not fit with the style of the property. No amount of estate agent spin is going to endear buyers to a leaking lean-to with a shoddy finish.
Adding a fourth bedroom increases the pool of likely buyers for your home, but adding a sixth, seventh or eighth bedroom will likely decrease it. Creating extra bedrooms without increasing the size of the communal areas to accommodate more people is another mistake.
But of course not all improvements have to add value to your home.
If your plans are to stay in a house indefinitely, make the additions that you want, rather than to top up the end value.
A designated bar in the basement, complete with stools and optics, may not earn its money back, but in the meantime, you could become the most popular person in the neighbourhood, particularly if your local has fallen foul of difficult market conditions and called time.
A swimming pool or built-in sauna, steam room or jacuzzi, equally, is unlikely to add the thousands it costs to your selling price, but if you will use it regularly, it will be worth the money of installation and upkeep.
A press release I received this week reported an upturn in orders for wine cellars. Suppliers Spiral Cellars says sales of wine rooms, wine wardrobes and their signature underground spiral stores are up 20 per cent on last year.
At a cost of around £30,000, I suspect they are unlikely to add the same amount to the selling price of a house.
But if you decide that LBTT is too high to move, a wine cellar, or rather its contents, could offer high-value consolation.