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Feel like you need somewhere bigger?…. Move or Extend?

move or extend

There often comes a point in peoples lives where they start thinking that they just need more space. Whether it’s because there’s a new member of the family on the way, or because your wife’s shoe collection is starting to get way out of hand! Whatever the reason, you need to make a decision and you want help doing it.

The first thing to ask yourself is, is it feasible to extend? If you live in a flat, or you don’t have enough space, or if planning or other constraints don’t allow you to extend, then you aren’t going to be extending. On the other hand, if you do have space in the garden, or in the loft, then extending your home becomes a real possibility and it can save you parting ways with your much loved home and the memories it holds for you.

As a starting point, and whilst reading through this article, ask yourself these questions and think about how they apply to your situation:

Money Matters: How much money do you have? Would you be taking on a bigger mortgage if you moved? Would you have to work harder to pay for it? What are property prices going to do in the future?

Quality of Life: Would moving to a different area benefit you in terms of work and quality of life? What are the local facilities like? What are you looking for – fields and countryside, or nightlife and entertainment? What about schools?

Emotional Factors: Are you emotionally attached to your current home? Will you be moving away from loved ones or friends?

You have to bear these, and many more questions, in mind when deciding whether to move or extend, because at the end of the day it all comes down to you. Your individual circumstances. What you want. What you can achieve. What your ambitions are!


 

EXTEND

Choosing to extend allows you to stay in your own home, and it allows you avoid the hassle and stress of moving house. Furthermore, the sense of satisfaction and self-achievement can be enormous.

The benefits to be gained financially from extending your house vary depending on location. If you live in London where property prices are at an absolute premium, extending your property will probably make more financial sense than buying a new one. A very popular trend at the moment is basement extensions. These can add a lot of extra square meterage to your property, and in London that means value.

If you do choose to extend, then unless you intend to spend the rest of your life at the property, don’t design the place solely with your own requirements in mind. So if you want a massive room solely for keeping your wife’s enormous show collection in instead of having an extra bedroom, you may want to reconsider. Here’s a tip: always go with the extra bedrooms. In property terms, extra bedrooms means extra value, and that’s what you want!

So if you’re planning to sell in the future, add bedrooms to your extension. Make the layout logical. Avoid awkward and bizarrely sized or shaped rooms that no one other than perhaps yourself would have use for.

And if you do extend, consider your outdoor space. Don’t use up all of it! Parking and a garden are big selling points for a lot of buyers.

Try to maximise valuable floor space (…remember those bedrooms!) whilst minimising the loss of other amenities.

How much will it cost? 

If you live in London you are looking at least £1,500/m² for the building work. If you live in other regions of the country this could be as little as £900/m². As a safe measure, £1,500/m² will give you a rough guide to how much the build will cost. Alternatively if you have drawings and you are friendly with a builder they will be able to give you an estimate for the works. Bear in mind that you will pay 20% VAT on the cost of the build and this will not be included in the estimate.

Note: if you knock down and rebuild this will be considered a new-build for which you do NOT pay VAT.

Also bare in mind that on top of the cost of the build you can typically expect to allow for 10% of the build cost for professional fees. This includes, architects, structural engineers, planning, building regulations, and be aware of the Party Wall Act (more information on this can be found in the links below) which can cost you £1,000s of unexpected costs!

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Here are some useful links if you are planning to extend your property:


 

MOVING

Whilst moving house is a stressful experience, so is building an extension. Not only that, extending your home causes you a great deal of inconvenience for months, let alone the arguments with builders. So perhaps moving is a better option.

Moving involves the inevitable relocation of all of your possessions, your family, your children’s school, doctors, etc etc. It is certainly not without its inconveniences. So again, ask yourself the questions asked  at the beginning of this article to clarify to yourself why you would want to move.

From a financial perspective, moving can be a more beneficial option than extending. This again is location dependent. But let’s take an example:

Imagine you own a house in Greater London that is currently worth £500,000. You want to extend the property by 30m². This would cost roughly £55,000 to £75,000 depending on the nature and quality of the build. The value of property might then increase to £600,000. This is of course never guaranteed, and if you own more than one property you will pay Capital Gains tax on any profit you make. And this is an example in London where house prices are high, if you do the same work outside of London you may only just break even. Therefore you need to do your homework and get your maths right.

If you choose to move, then the cost in terms of fees varies from £5,000 – £15,000 on average. But then you may be taking on a higher mortgage costing you significantly more.

Figuring out which option is best for you and your circumstances

The most advantageous thing you can do is:

  1. get estimates your proposed building works
  2. add the cost of the estimate to the current value of your house
  3. take that figure and look at what properties you can get for it
  4. then determine whether you’d be getting more for your money from extending or from buying a new home.

At the end of the day the final decision lies with you and your circumstances and the reasons why you want to get more space. The best advice we can give is that whatever you do, do your research. Don’t be intimidated by the thought of building an extension (it can be incredibly rewarding), but if you do, do it properly and get professional advice.

And what ever option you choose, good luck with it all!

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