Home improvements vs moving house – which is right for you?

The UK’s stamp duty freeze until 31 March 2021 has convinced many homeowners that now’s the time to move house. Others have taken lockdown as a sign to stay put and make home improvements. We take a look at how renovating could add value to your home, whether you’re planning a sale or not.

The UK’s stamp duty freeze until 31 March 2021 has convinced many homeowners that now’s the time to move house. Others have taken lockdown as a sign to stay put and make home improvements. We take a look at how renovating could add value to your home, whether you’re planning a sale or not.

Chris King
From the Home team
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Posted 4 AUGUST 2020

Should I move or improve?

If you want more space to accommodate a growing family or you crave a touch of luxury like an ensuite bathroom, you have two choices – move to a new property that meets your needs or make some improvements to your existing home.

Both options come with pros and cons. You might have to live on a building site for a while (even seemingly small jobs can create huge amounts of mess), but you could also add value to your home as well as making life more pleasant when the work’s completed.

However, it’s important to remember that there are some things no amount of DIY or renovation work can change. If you don’t like the area your home is in or your garden’s the size of a postage stamp, it might be worth selling up, rather than doing up.

How will the stamp duty holiday affect the cost of moving house?

On 8 July 2020, UK Chancellor Rishi Sunak announced a holiday on stamp duty payment, in an attempt to breathe life into a sluggish housing market heavily impacted by Covid-19.

The freeze on the tax for any property up to the value of £500,000 runs until 31 March 2021 – with the potential to save the average mover £4,500 and a maximum of £15,000.

Compare the Market research, conducted during the opening days of the freeze, suggests 80% of homeowners who’ve been considering a move since lockdown began are even more likely to do so as a result of the announcement.

In fact, over half of this group (57%) are now looking at higher value properties than they were before the stamp duty freeze took hold and bolstered their budget.

The research also suggests many people have been making home improvements to add value to their current property, with a third (32%) planning to undertake some form of renovation.

And of the 62% of homeowners who’ve made improvements in the past 12 months, 20% wanted to increase the value of their home for a later sale.

Read our guide Stamp duty explained for more information on the tax.

Which home improvements add the most value?

Whether it’s upgrading your kitchen, adding a conservatory or creating off-street parking, there are numerous ways you can improve your home and add value in the process.

But exactly how much value you add to your property will depend on what improvements you choose to make.
The table here shows just how much you could stand to gain from your home improvements.

Typical value home improvement can add to your home:

Home improvement   Typical average value added**
Garage conversion 20% £46,371
Loft conversion 15% £34,778
Off-street parking 10% £23,185
New kitchen 6% £13,911
Additional bathroom 6% £13,911
Conservatory 5% £11,593


It seems the best way to increase the value of your home is to add space. A garage conversion has the potential to earn you the most money, adding roughly 20% to your home's value. Based on the average house price of £231,855, this could equate to an uptick of £46,371 on the sale price.

The next best investment you can make is a loft conversion. This will add around 15% – that’s an average £34,778 – to the value of the typical UK home.

But even relatively simple improvements, such as installing off-street parking, can offer a big return, adding an extra £23,185 to the value of the average house.

And if your kitchen needs an upgrade or you’re considering adding another bathroom, it could be worth doing. Not only will you get to enjoy the results, you could also be looking at an extra 6% for each on the value of your house.
But a cautionary note though, while home improvements can be a great way to add value to your home, 14% who made improvements during the past 12 months went over budget. So make sure you have some contingency built into your budget.

It might be worth considering a home improvement loan if you need to borrow to pay for your building work.

**Percentage value added from Virgin Money.
Monetary value added based on ONS average house price of £231,855.

How much can I add to the value of my home? 

Exactly how much value improvements will add very much depends on where you live. In London, where house prices are much higher to begin with, returns will also be higher.

It’s also worth noting that most areas will have a ceiling price – the maximum value your home will reach, regardless of what improvements you make. Before planning any big changes, it can be helpful to speak to a local estate agent or surveyor to find out how your plans might affect the property’s value.

How will home improvements affect my insurance?

If you do intend to make home improvements, don't forget to tell your insurance provider. Otherwise, if you have to make a claim, your policy may be invalidated.

Why do I need to tell my insurance provider about my home improvements?

If you’ve got building work going on at home, your insurance provider may consider that an extra risk to your house and its contents. And it’s not just the work itself that adds to the risk. Your home may be unsecured and more people will have access to it.

Your insurance provider will also need to know about any changes to the number of bedrooms and bathrooms, as this will affect your premium. You’ll also need to flag up any changes to locks on windows and doors, which will be considered a safety issue.

It sounds like a hassle, but a quick call to your insurance provider could save you a lot of trouble in the long run.

Read more in our guide Will home improvements affect my home insurance?

Chris King

From the Home team

What does the expert say?

“The Chancellor’s decision to freeze stamp duty has inspired many homeowners across the UK to make the decision to move and look above their initial price range.

However, moving can still be expensive when you consider other costs, such as legal fees, estate agents fees and removals. Our research reveals that many homeowners are opting to use that money to update their interior design or add a new kitchen or bathroom to their home. Such improvements could increase the value of the property further when they do decide to sell.

“If improvement work is done on the home, you must then inform your insurance provider of the changes made. Properties that are undergoing building work can constitute more of a risk to providers, and if you’re planning to undertake major works it’s always worth notifying them.

“They need to know if the number of bedrooms and bathrooms is changing, or if there are changes to security features like locks on windows and doors. Equally, there’s a risk to contents when premises are unsecured and if a larger range of people have access to your property.

“If you decide to do the work yourself, you may want to see what level of accidental damage cover you have in place, just in case something goes wrong with your handiwork.

“Always check the terms and conditions of your policy to see what it covers before starting any major home improvements.”

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