A new survey from Nationwide Building Society has revealed that we have given up on the idea of moving - and have instead decided to invest in home improvements for our current property. It says that an impressive 47% of people are choosing to make home improvements within the next year, compared to just 8% of people who are planning to move.

However, in a market like this, this is fraught with risk.

The drive to improve is perfectly understandable. Paul Wootton, Nationwide's head of personal loans, commented: "A static housing market means many people are unable to move home and are opting to make home improvements instead." The survey found that 72% want to update or modernise their décor. Meanwhile one in 10 are running out of space in their property so are looking at remodelling or expanding, either into the garden or the loft.

Adding value

There are some improvements which are highly likely repay the investment. As we reported earlier this month, the right improvements - such as increasing energy efficiency or extending the property can repay the investment - either by adding to the value of the property or cutting your bills.

RICS says that a typical loft conversion will increase the value of your property by 5% - and the right one (on the right property) could boost it by as much as 10%. Other RICs suggestions for adding value include a side extension, installing a downstairs toilet, landscaping the garden, adding decking or building a patio.

How to pay?

Even if you opt for a sure-fire winner, you need to think very carefully about how you finance this sort of work. You may have the savings in place, so the improvements won't cost you any more than the price of the building work. However, many people will take out a loan - which can prove very expensive.

Nationwide says that the most common amount borrowed for a home improvement personal loan is around £10,000 over five years. If you borrowed this from Barclays at 9.9% this would eventually cost you £12,727.80. When you are calculating the potential increase in value against the amount you are likely to spend, it is essential to include the costs of any borrowing.

In many cases, the maths just wont stack up. With house prices relatively static, or even falling, there's a risk that you could end up spending far more on improvements than you will ever make back when you sell up.

Reduce value

According to Halifax, some 'improvements' could even reduce the value of your home. It says that stone cladding or pebble dashing will reduce the value by 10%. Swimming pools, meanwhile, may not reduce value but will make your home harder to sell - which could mean you end up having to do a deal with a buyer. Artex ceilings, brave colour choices and OTT interior design were also named as value-destroying culprits.

Of course, whatever you choose to do, if you execute it badly you will damage your property's value, because any prospective buyer will see it as something they have to do all over again.

Do it anyway

There will be plenty of people, however, who don't need to do the maths, because whatever they spend will be worth it to them. If they are desperate for the space, but love the location and the look of their home, then money spent on a loft extension will be well spent. Likewise if the tired old kitchen is starting to fall to bits, they may have more pressing concerns than whether they will make their money back.

Then there are those who need to make changes to their home because of wear and tear, and neglecting these sorts of improvements could be detrimental to the structure in the long term.

But what do you think? Are you keen to improve your home, and do you care if you ever make the cash back? Let us know in the comments.



More stories

• RICS call to help first-time buyers
• Super sub-3% mortgages
• How to make your property standout when selling