Last week, a landlord from Hampstead emailed me to ask,
after reading the Hampstead Property Blog, if he should extend his terraced
house making an extra bedroom in the loft. He had a builder friend who owed him
a favour, and thought a good way would be get an ‘inexpensive’ extension.
Having more useable space is generally thought to be
consistent with better quality accommodation and homeowners and tenants are
prepared to pay for it. If you added a bedroom to a two bed terraced to
make a three bed terraced, it will add 10% to the value of the property. Turn a three bed terraced into a four bed terraced
and 9% will be added to the value. Looking at semi detached properties,
and turn a two into a three bed and 12% will be added to the value, whilst
making a three bed semi into four bed will add 9% in value.
However, before you rush off to the planning department
there are some important considerations, whether you are a homeowner or
landlord. What would be the cost of
making that extra bedroom? The average value of a terraced house in Hampstead
is currently £2,205,436 whilst the average value of a semi detached house is
£3,424,029 meaning to make money the cost of the extension would need to be less
than £220,543 on the terraced property and £410,883 on the semi detached house.
Talking to a number of trades people in the NW3 area, most are booked up into
the New Year. Also, no matter how good a friend he was, I don’t think a
£200,000/£300,000 extension was ever on the cards! Maybe the builder was just
thinking of a bit of re-pointing work on the chimney!
Well, that got me thinking about how bedrooms affected
rental prices and rent-ability as well.
Interestingly below, you will see that whilst bedrooms do have an effect
on the rent that can be achieved and the rent-ability of the property – the
difference does not warrant the expense, hassle and trouble of extending.
· 17.6% of the one bed properties on the market to
rent in Hampstead have a tenant with an average rent of £1,759 per month
· 10.8% of the two bed properties on the market to
rent in Hampstead have a tenant with an average rent of £2,831 per month
· 13.9% of the three bed properties on the market
to rent in Hampstead have a tenant with an average rent of £4,459 per month
· 10.8% of the four bed properties on the market
to rent in Hampstead have a tenant with an average rent of £8,904 per month
Now, if you want to increase the value of your property, be
you a Hampstead landlord or homeowner, there are things that cost a lot less
than building extra bedrooms. There are two key factors that determine the value
of any property and they are location and condition. Spruce up the exterior, emulsion
all the rooms, install new carpets and curtains. For homeowners, a matter of two
to three thousand pounds can add tens of thousands, whilst for landlords; these
things can add an extra 10-15% to the rent that you can achieve. For more
advice and opinion on the Hampstead Property Market, visit the Hampstead
Property Blog www.NW3propertyblog.com
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 7435 0420. Pop in for a chat – we are based on Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. The kettle is always on.
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