[a_humean]

Well one thing is there is often a pretty big disconnect between the asset prices of these homes and the incomes of the current owners (these houses have exploded in value over the past 40 years), but setting that aside because you are basically right at least in terms of potential equity:

The main issue is to add insultation you either do exterior insulation which covers up all of the period features that make the property valuable in the first place (and could lead to complaints from neighbours) and for many terrace houses the space between the front of property and the public street is 0, or you give up interior floor space which even at this price point is actually pretty small already. Both lower the value of the home which for most British people is the primary and often only investment (UK financialisation of housing).