Home Report Value: Why You Can't Deduct Renovation Costs

Why you can't knock your renovation budget off the Home Report value.

I see it on nearly every viewing and it doesn't much matter whether it's a seafront cottage in North Berwick or a first-floor flat in the Old Town. A buyer walks in, opens a cupboard and I can almost watch the calculator light up behind their eyes. New kitchen, re-tile the bathroom, tear out whatever the last owner was thinking with that carpet. By the time they reach the garden there's a running total in their head, ten grand here and fifteen there - and they'd like the whole lot knocked straight off the Home Report value.

I understand the instinct. It just rarely plays out that way.

The Home Report value isn't an opening bid waiting to be chipped down by every avocado bathroom suite or swirl of Artex on a Longniddry ceiling. It's a valuation, done by a RICS surveyor - and the condition of the place is already taken into account. It's the part most buyers miss.

A surveyor isn't squinting at the woodchip and taking a wild guess. They're weighing comparable sales along the same streets, price per square metre, the real conditional state of the property and whether it stands out either way. The Gullane house the whole village covets values up. The tired flat in a smart Edinburgh terrace, the one whose photos are doing 'heroic' work, values down. The dated kitchen a buyer is standing in has already pulled the figure lower, so knocking a renovation budget off on top of that is charging for the same fault twice.

Condition and style get muddled here and they really aren't the same thing. Condition is the roof, the wiring, the damp, the kitchen that has genuinely given up - and a surveyor prices all of it. Style is the tiles on the walls and the carpet you'd never have chosen yourself. A surveyor doesn't price taste and honestly a buyer shouldn't either.

There's a gentle warning in that for sellers and it's one Phil and I find ourselves giving fairly often. The carpet you lovingly chose might be the next person's reason to call the Design Police. The brand new bathroom you fitted specially to help it sell could be the very thing that boils someone's head the moment they walk in. Taste is personal and it's never going to land with everyone, so the weeks before you go to market aren't the time to test the outer limits of your artistic flair. Anything a buyer would rather rip out tends to come back as a line they'll try and chip you down on. Sort what's actually broken and leave the styling to whoever ends up living there.

None of this means switching your brain off at the front door. A proper doer-upper can swallow serious money and Phil appraises enough of them to tell you the sums matter before you commit rather than after. Know what the work will cost but don't expect the Home Report to hand it back, because it already has, in the number it landed on.

A Home Report value rarely shifts. What moves is the market around it. A house can sit for months and months, going a little stale on a good street in Trinity or a fine spot in Aberlady and eventually the seller softens on price. It's not that the valuation was wrong, the market simply hasn't turned up at that level yet.

Phil and I have these conversations with buyers and sellers most weeks, from the coast road to the New Town, and the buyers who come out ahead are rarely the ones with the longest list of complaints. They're the ones who understand what the number in front of them actually stands for. Value follows condition, the things genuinely right or wrong with a property, not whether the carpet is to your liking. A buyer who has that straight reads a Home Report the way the surveyor intended it and knows the difference between a price worth challenging and a bit of taste they can change themselves for the cost of a tin of paint.

Condition is what you're paying for. Style is what you'll make your own once the keys are yours. Keep the two apart and you'll always have a proper sense of what a home is really 'worth'.