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

With stamp-duty holidays having been in effect throughout much of 2020 and 2021 in the UK, many homeowners have taken the initiative 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. 

With stamp-duty holidays having been in effect throughout much of 2020 and 2021 in the UK, many homeowners have taken the initiative 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. 

Helen Phipps
Insurance expert
minute read
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Posted 6 JULY 2021

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 renovate your existing home. 
Both options come with pros and cons. If you decide to renovate, 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. 
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. Likewise, if your children have left home and you’re rattling around a giant house that’s getting increasingly hard to take care of, you might be better off downsizing. 

What can I do to renovate my home? 

There are lots of changes you can make to your house to make it more workable and enjoyable for you and your family – or to make it more attractive to potential buyers. Here are a few common examples: 

  • Create more space to accommodate your growing family by building an extension 
  • Convert existing space, such as a garage or loft, into a bedroom or family room  
  • Update your kitchen 
  • Install modern insulation to increase energy efficiency  
  • Install renewable energy devices like solar panels or a modern heating system to make your home greener 
  • Modernise your bathroom or add an ensuite 
  • Remove internal walls to create an open-plan living space 
  • Add a conservatory to your home, or a deck or patio to your garden 

Which home improvements add the most value?

Not all renovations will automatically add value to your home. Something that’s to your taste might not appeal to potential buyers down the road. If you want to renovate your home to make it a better fit for your family, then there’s priceless value in that. But if you’re renovating with the goal of selling in the near future, you’ll need to be mindful of how much value your improvements will actually add. 
Whether it’s upgrading your kitchen, adding a conservatory or creating off-street parking, there are loads of 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 renovations you choose to make, as well as other considerations like your individual property, performance of the local market and what buyers are looking for in your area. Young families, retired couples and young professionals will all place different value on different improvements. 
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 maximum percentage increase in home value  Typical average value added**
Garage conversion 10-15%  £28,982 
Loft conversion 20% £46,371 
Off-street parking 5-10%  £17,389 
New kitchen 3-10%  £15,071 
Additional bathroom 4-5%  £10,433 
Conservatory 7-10% £19,708 


It seems the best way to increase the value of your home is to add space. A loft 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 £256,000, this could equate to an uptick of £51,200 on the sale price. But, with a typical price tag of up to £30,000, it’s also the most expensive area to renovate. 
The next best investment you can make is a garage conversion. This will add up to 15% – that’s an average of £38,400 – to the value of the typical UK home. It’s also the second most expensive option though, with a typical cost of up to £20,000 to renovate a garage and turn it into another room. 
But even relatively simple improvements, such as installing off-street parking, can offer a big return, adding up to an extra £25,600 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 adding value. Remember though that if you’re doing it up to sell, you’ll want to update to a style that’s likely to be attractive to buyers, and not necessarily the design you would have picked for yourself.   
And a cautionary note: while home improvements can be a great way to add value to your home, our research showed 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 £256,000

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

Exactly how much value any renovations will add very much depends on where you live. In London, where house prices are typically 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 far your plans can realistically expect to affect the property’s value. 
Read our guide on how to increase the value of your home.

How will home improvements affect my insurance? 

If you do intend to renovate your home, 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 have 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, should you need to make a claim. 
Read more in our guide: Will home improvements affect my home insurance?

What do I need to do if I decide to move house instead? 

If you’ve decided it’s time to move on, read our guide to selling your home for tips.  

Frequently asked questions

How do I work out the ceiling price of my home?

Start by having a look at property websites like Rightmove and Zoopla to see what similar properties, with the same number of bedrooms and bathrooms, are selling for in your area. That should give you a good idea of the maximum price people are paying for homes like yours.  
For an accurate valuation though, you’ll be better off getting a professional opinion from an estate agent. That can help you decide if your renovation project will add value or not, and if so, roughly how much.  

How can I fund home improvements?

If you’ve got your heart set on a home renovation but don’t have enough money saved, there are other ways you can get your project off the ground. First, though, it’s a good idea to get quotes from a few different tradespeople to get a more accurate idea of costs. Then, carefully work out a budget to see what you can afford and how you’ll be able to repay any money you borrow. Remember to build a little contingency into any budget, as renovations often end up costing more than predicted.  
If it’s a small, short-term project and you need a little advance to get it started, you might be able to fund it using a credit card. Just make sure you can make the repayments before the interest starts building up.  
If it’s a larger project, you could consider a home improvement loan instead. Or if you’re coming to the end of your mortgage, you could remortgage for a larger amount to cover the renovation costs. You’ll end up with higher mortgage payments, but it could be worth it if your renovations will improve your quality of life in your current home and save you from the costs of moving.  
Read our guide to funding home improvements

Do I need to tell my home insurance provider about all home improvements?

If you’re just giving your house a fresh lick of paint, there’s no need to update your insurance provider. A good rule of thumb is if your renovation project will increase the value of your home then you need to notify them, because it will be factored into the rebuild cost of your home.  
Find out how to calculate the rebuild cost of your home

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 fit a new kitchen or bathroom in 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 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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