How much value do home extensions add? New tool estimates the value of home improvements using area and average costs

A new tool juggles postcode, labour costs and extension size to reveal how much you could boost your home’s value per square metre 
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The average asking price of a London home is now £6,219 per square metre, more than twice that of homes in England and Wales as a whole, according to a report released today.

Comparing a home's price per square metre to the averages of other properties nearby has long been a go-to measure of value for aspiring buyers, with the UK median home size currently just over 80 square metres — or 893 square feet.

Once you’ve taken the plunge and bought a place, with rising moving costs and years of stagnant house prices making it harder than ever to move on, extending is often the best way to try to add value or create much-needed space.

But will any improvements you make boost your home’s value by as much as you’d hope?

A new House Extension Cost calculator, launched by online property portal Rightmove, estimates the potential value of home extensions by considering asking prices per square metre, based on local postcode averages, and estimated labour costs for small (15m2), medium (25m2) and large (35m2) extensions.

Table: top 10 most expensive areas per square metre

Postcode Area Average property value per square metre
W West London £10,427
SW  South-west London £9,192
NW North-west London £8,398
N North London £7,238
SE South-east London £5,862
E East London £5,795
HA Harrow £5,768
TW Twickenham £5,765
KT Kingston upon Thames £5,597
AL St Albans £5,582

In England and Wales, the top 10 most expensive areas by price per square metre are all in London or within a half-hour commute of the capital.

West “W” and south-west “SW” London postcodes come top of the list, with average prices per square metre of £10,427 and £9,192 respectively. Kensington W8 currently has a 60-bedroom property for sale for £33 million, while good schools, open green spaces and period homes attract well-heeled buyers to south-west London areas such as Chelsea and Fulham. Old St James's Vicarage, a Gothic Revival property in Maxwell Road, SW6, is currently for sale for £7.5 million.

North-west “NW” and north “N” postcodes have average prices respectively of £8,398 and £7,238 per square metre, coming third and fourth on the list. Homes on the market in these areas in recent months have included a record-breaking £75 million mansion in St John's Wood NW8, and a 10-bedroom Hollywood-style mega mansion for sale for £40 million near Hampstead Heath in N6.

The only outer London postcodes to feature among the top 10 most expensive areas are Harrow, which has 15-minute trains to Marylebone; Twickenham, 10 miles south-west of central London; riverside Kingston upon Thames, on the Surrey borders with good transport links to central London; and commuter favourite St Albans, only 21 minutes by train from St Pancras International.

Table: top 10 most expensive places for labour costs

Postcode Area Average labour cost for a medium extension
KT Kingston upon Thames £29,975
TN Tunbridge Wells £28,650
BR Bromley £27,930
CR Croydon £27,892
TW Twickenham £27,800
BS Bristol £27,440
NW North-west London £27,200
GU Guildford £26,730
CT Canterbury £26,700
N North London £26,449

Of these 10 areas highlighted as having the most valuable square metre cost, four also appear on the list of 10 areas with the most expensive labour estimates for medium extensions. Kingston comes top with average labour costs of £29,975, while Twickenham, north-west London and north London also feature.

So a property in Kingston could see a value increase of between £129,432 and £150,421 after a medium-sized extension costing around £29,975, while a property in west London may see an increase of between £241,135 and £280,238 for an extension of the same size but costing around £26,000.

A medium-sized London extension costs £21,210 on average for labour, while the average for England and Wales is £20,796.

Labour costs were based on quotes from more than 1,000 builders, with average prices of homes by square metre calculated using data for 103 postcodes across England and Wales.

Final costs and estimated values depend on the finish of the renovation, the materials chosen, and whether the property has already hit an affordability ceiling for the area.

How to bag a bargain

Canny home improvers could save on Stamp Duty by buying a property in one threshold and renovating to a high standard, so as to increase its final value.

One such "doer-upper" recently on the market is an unmodernised £17 million mansion in St John's Wood, near Sir Paul McCartney's London base, with potential to almost double the value by renovation and extension.

A buyer of the property in its current state would pay £1,947,750 in stamp duty but after the work is done, the tax bill for the next buyer could be as much as £3,513,750.

Revealed: London's best renovations and extensions

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Home extension inspiration

UK homeowners spent £295 billion on home improvements over the five years to 2019 according to Post Office Money, with some choosing to future-proof their property with eco-friendly, hi-tech or fashionable renovations.

Last month saw seven projects named London's best renovations at New London Architecture's Don't Move, Improve! 2020 awards, with the winning homes packed with inspiration for the UK's legions of aspiring home improvers.

An extension, called a "simple addition" by the judges, which involved transforming a former disused alley in Lambeth — incorporating it into an existing home — won first prize.

The winner of the "compact design of the year" prize was a formerly narrow, cramped Victorian terrace house which has been radically remodelled and extended to the rear and side.

The kitchen now has extra width thanks to the side extension, and skylights to flood the dining space with daylight, while the rear extension cuts into the garden, allowing for a window bench where the owner can sit and read in the evening sun.

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