Since house prices began to fall over two years ago, many homeowners have found themselves trapped in negative equity or forced to sell at a loss.
So, as an alternative to moving home, an increasing number of us have decided to make the most of what we've got and push up the value of our property by turning to home improvements. In fact, recent statistics from Halifax show that more than half of all British homeowners are currently engaged in sprucing up their homes.
But not all improvements will add value to your home - some can even decrease it. Read on to discover which changes will bring you real benefits.
Add another room
Tim Beattie, sales manager at the West Putney branch of estate agents Kinleigh Folkard & Hayward, says creating more space is likely to add the most value to your home. "Adding square footage to your property will generally always add value," he says.
A successful way of doing this is through a loft conversion. If you convert your loft into an additional bedroom with an en-suite bathroom, it will cost an average of £40,000. If it's completed to a good standard it will usually add value of a similar amount or more to your home.
But Mike Edwards, business development director at free construction advice website diydoctor.org.uk, says homeowners should be wary about the cost of such a conversion.
"This is even more the case if you have to lose the use of an existing upstairs room in order to make way for the sort of staircase that will be required to reach your loft safely," he says.
So homeowners who want to increase the size of their property should be aware of what they may lose by doing so.
"Only add a bedroom if it will create extra room," advises Edwards. "It's far better to have three good-sized bedrooms than four small ones. And if you do add a bedroom, add a bathroom too. You won't increase the value of your property by much if you put in a bedroom without one."
Revamp your kitchen or bathroom
Most experts agree that if you can only renovate one room in your property you should make it your kitchen. Kitchens have become the focal point of a house and it's often claimed a good kitchen can sell a property.
"A large, well-appointed kitchen may add about 12% to the value of your house - but large, well-appointed kitchens are very expensive," warns Edwards.
Fitting a kitchen from scratch, including the removal of old fittings, flooring and wall tiles, can cost fom upwards of £14,500 for a terraced property to £50,000-plus for a top-of-the-range kitchen in a detached house.
If you can't afford to install a brand new fitted kitchen, just improving the superficial appearance of the one you have can add a few thousand pounds.
Similarly, bathrooms are more or less guaranteed to add value to a property. Fitting a new bathroom can cost between £500 and £10,000 for a basic suite, with prices soaring up to around £20,000. However, experts predict this could add as much as £25,000 to the value of your property.
Increase storage space
One thing that will usually add value to a property is extra storage space. For example, adding a garage, with a bedroom and bathroom placed over it, can add as much as 15% to the value of your property. However, it will usually cost you between around £3,000 and £5,000 to construct.
Also, once again, there are pitfalls to be wary of. "Adding a stand-alone garage will usually pay for itself, whereas converting a garage into a 'living' room very rarely does," explains Edwards.
"It's a storage thing. Increasing storage space in a home can help raise the value, but not at the expense of a bedroom."
Spruce up the outside
When adding to the outside of your property it's important to first consider who exactly your likely buyers are.
Edwards says money spent revamping the external appearance of your home is never wasted, and if car parking is at a premium in your area, it may also pay to lose a little of your garden.
"You may reduce your market by losing young families as potential new owners, but professional, two or three-car families will love the off-road parking," he says. Creating off-road parking can cost between £600 and £1,000 but can add 10 times as much value to your home.
In recent years, green properties have soared in value as energy efficiency has become a high priority. Although the government withdrew the ill-fated Home Information Packs, it retained the Energy Performance Certificate element, demonstrating the growing emphasis on greener properties.
For example, good insulation prevents unnecessary loss of heat and helps cut energy bills. So although it won't necessarily increase your home's value, it will help attract potential purchasers: a recent survey by Clydesdale Bank revealed a third of first-time buyers would avoid a property that's not energy-efficient.
Wall insulation for a three-bedroom house usually costs between £350 and £500.
Double glazing is a big attraction too, and can also add a decent amount in terms of value. Installation can cost around £300 a window, but can add as much as £10,000 to your house price.
Solar panels are a great addition to a property in terms of green credentials, but while they cost between £3,000 and £5,000, experts say that at the moment they add no value whatsoever. "They're still very much in the 'suck it and see' bracket," says Edwards.
Give it a lick of paint
If you don't have the means to fit a state-of-the-art kitchen or turn your dusty old loft into a sleek new bedroom, there are still ways to push up your sale price.
"If you're not keen to spend thousands on extensions and kitchen refits, then simply by doing some essential maintenance on a tired-looking property you'll help enhance its value," says James Green, senior partner at West Country estate agents Stags.
"For example, a fresh lick of paint, putting new doors on kitchen cupboards or tidying up the garden will make your home far more appealing," he explains.
"If your property stands out from the other properties on the street, the agent should be able to squeeze a little more money out of the purchaser."
Don't do this...
While some home improvements may not add much value to your home - often just breaking even - there are other changes that could actually devalue your home.
• Losing a bedroom in your property, for any reason, will devalue your house. If you're considering losing a bedroom in order to create a bathroom or study, think again.
• Conservatories - unless the new owner is really desperate to own one - will very rarely pay for themselves.
• Garish and 'unique' kitchens and bathrooms will have a detrimental effect on value.
• Swimming pools or jacuzzis are unlikely to cover the installation costs.
• Decoration needs to be neutral - just because you love bright colours and patterns doesn't mean prospective buyers will.
Know your limits
It's important to consider how much value you can add to your home, given its location. "Extending and over-modernising your home can be fruitless," says Paul Warren, area director for estate agents Connells.
"Always consider the maximum your property could be worth in its area, remember it is all about location, location, location."
There's likely to be a ceiling in terms of how much you can push your house value up to. If the average sale price on your street is £500,000, renovations could net you an extra £50,000 or even £100,000, but you're unlikely to be hitting the £1.5 million mark any time soon.
"Renovation added £120,000 to our house"
Financial marketer Andrew Milburn, 41, from Liverpool, and his wife Sharon, 40, made the decision to renovate their whole house after having "one too many drinks" one evening in 2005.
While the couple are happy with the area they live in and the house itself, they were keen to have more room. After spending months talking about what they could do, they came up with the idea of undertaking all the renovations at the same time.
The couple built a porch at the front of the house; a study at the back; fitted a downstairs bathroom; knocked the kitchen into the dining room to make one huge room; built a utility room; put a wall that had been taken down in the lounge back up to create two lounges (one for the kids); extended the box room to make it twice its original size; added another bathroom and bedroom; and converted their loft.
Andrew says the building, plumbing and electrical work took around four months. "But then the hard work began as we decorated and finished each room," he says. "In all, it took around four years."
The cost of the work was around £70,000 but Andrew says it has added around £120,000 in value. "The main reasons we did it were, firstly, we could afford it and, secondly, the kids needed more space," he says. "During the summer holidays they were treading on one another's toes."
Andrew and his wife have no regrets. "It's definitely been worth it," he says.