With property prices continuing to rise and recent increases in interest rates starting to bite, many homeowners are deciding to stay put rather than move. Instead of shelling out vast sums on stamp duty, legal, survey and estate agent's fees, and mortgage and removal costs, they are choosing to invest in their current property - maximizing their enjoyment of it now and, they hope, adding value for the future. Unless you carry out the right kind of improvements, however, you're unlikely to see even a return on your investment. By all means, indulge in a swimming pool or a garden makeover - they may add immensely to your quality of life - but don't expect them to boost your home's value. And even if you choose the right sort of improvements, if the work is done badly, or in a style that is unsympathetic to your property or the area, they may actually reduce it.

Some points to consider: Location is the most important factor in deciding the value of your property and, therefore, how much you stand to gain from improvements. Never develop a property out of its neighborhood, externally or internally. Pinpointing the sort of buyer you will be targeting when you come to sell is a good way of ensuring you don't get carried away. Before you knock down that wall to transform two small rooms into a larger, open-plan living space, consider: if your target market would be young families, double doors might be a better option. Seek advice from a local estate. Some improvements, like installing a security system or restoring period features, won't add appreciably to your home's value, but may help make it more saleable.

Convert your loft: One of the most popular ways of adding space, a loft conversion can increase a property's value by as much as 20 per cent. In some cases, the work can be carried out without planning permission, under what are known as permitted development rights (see Obtaining Planning Permission). Before calling in the builders, consider whether your property will benefit in investment terms from the extra accommodation. If not, a loft conversion could be an expensive mistake. You cannot transform your three-bedroom house into a desirable five-bedroom one just by converting the loft into two bedrooms; chances are that the downstairs rooms, and perhaps the garden, will not be in proportion. In the longer term, you might be better off moving now. Consider also whether you have the right kind of roof. The steeply pitched kind commonly seen on Victorian or 1930s houses is ideal. And both the construction of your roof and the type of access available may limit your prospects of converting your loft into a proper room, rather than just a 'loft room'.

Build a garage: A garage, particularly a double, will almost always add value - as much as 15 per cent in a busy urban area. The desirability of garages often makes it a mistake, if adding value is your goal, to convert a garage into living space.

Add a bathroom: Here, we have in mind converting a bedroom into a bathroom, rather than building a new bathroom as part of a loft conversion or extension. Use common sense when deciding whether this is a viable option for you. If, for example, you have a five-bedroom house with only one bathroom, it may be wise to turn a bedroom into a bathroom. However, from an investment point of view, it would be a poor idea to transform a three-bedroom house with one bathroom into a two-bedroom house with two bathrooms.

Update your kitchen: While a new kitchen may not add greatly to value, it will certainly add hugely to appeal, provided it is well fitted, of reasonable quality and as timeless as possible in design. As with any home improvement, resist the urge to save money by fitting a kitchen yourself, unless you are confident of doing it to a professional standard.

Improve your bathroom: Gone are the colored suites of yesteryear; today, the only color is white. Avoid fancy taps, lurid tiles and anything gold-plated. If you're tempted to go for a fashionable wet room, consider whether this is something your target purchaser would be likely to want.