Should you extend your home or sell it?
After years of comfortably living in your home, the time may come when you must consider whether to sell or extend your current property if you are in need for extra space. This is a common dilemma for many homeowners who are either desperate for extra space or want to create major changes to the property where they currently live.
There are several reasons why homeowners get to a certain stage in their lives and decide that they need more space. Perhaps you’ve grown your family and the space that you once shared is now too small and cramped for everyone to enjoy. Perhaps you want to have an extra room for a home office, maybe a workshop room to practice your hobbies, or even a home gym! All of these options are becoming more and more common and popular in a new Covid19 world where we all spend more time at home and so many of the places we once used to love visiting, such as the gym, are still shut.
Regardless of the reason, there’s a lot to consider before deciding on the next step. Whether it makes more sense to sell or to extend depends on various factors – the costs, your plans in the future, your emotional attachment to the house, the area you live in and on the current state of the housing market.
In this post, we’ve cited some considerations that you should be making to figure out whether it’s better to opt for a home extension and improvement or a sell up and move up.
Home Extension
A house extension could be an affordable and cost-effective way of improving your property’s market value. The opportunity to add value to the property will depend on the type of the extension you’ll decide to build. For instance, a three-bed house that’s been upgraded to four-bed will likely bring in a higher resale value.
Before embarking on your extension project, here are some of the extension types homeowners usually consider:
· Single storey or rear extension
· Double or multiple storey
· Kitchen extension
· Garage conversions
· Loft conversion
· Wrap around or L-shaped extension
· Basement conversion
The costs will widely depend on the location, type of extension you choose to construct, the size and the quality of the works. The bigger the home development, the more expensive it can get. Don’t forget to factor in these extra costs that you might incur as well:
· Architect’s fees
· Planning Permission fees
· Property surveys
· Building regulation checks which are typically 10% of the extension cost
With these associated costs in mind, it’s very important to think about whether your investment is likely to pay dividends in the long run. It’s important that you speak to a professional too to help you assess whether what you want to do is actually viable.
In the UK today, the housing market is unpredictable and unprecedented, and the supply of housing has not been keeping up with demand which is why many people might consider staying in their current home and improve it rather than moving. That is a way practical and a smart option for now as growing families seek more space and the house prices continuously grow.
Selling & Relocating
Building an extension can be exhausting and the costs involved are undeniably significant. If you think it isn’t the best option for you and you don’t have any intention to stay in your property for the long-term, then selling your home and moving into a new property might be the answer.
The dilemma of whether to move or not is a complicated one and families and individuals will often take months or years or deliberation before they actually put their property on the market. In the UK, it is currently a sellers market which means, in short, that the demand for properties is outstripping the supply. In theory, you will therefore have a higher number of people viewing your property if you decide to sell it and in turn, a higher probability of selling it quickly for the price you require. The challenging part is finding a new home to move into all at the same time. It is important to work closely with estate agents you know and trust to help make the move as stress-free and enjoyable as possible.
It is important to understand the local trends in your housing market and the total costs involved in selling a home. Hiring an estate agent could also help you set a fair and competitive selling price for your home. Just like building an extension, there are plenty of costs involved in selling too, for example:
· Property survey – starts from around £400
· Average house deposit - you need at least 5% to 20% of the purchase price
· Estate agent fees - usually 1% to 3% of the sale price
· Legal fees – legal works comes up with fess typically £850-£1,500
· Valuation fees - cost can be £150-£1,500 based on the property’s value
· Surveyor fees - survey costing ranges around £250 to £600 or more
· Removal costs - range from £300-£600, although you could rent a van do it yourself
· Stamp Duty
Whether you’re a first-time buyer or a home mover, it is important to know about these costs and be prepared so nothing leaves your surprised or out of pocket.
The Pros and Cons of Extending and Selling Your Home
Extending your home
Pros
· Cost-effective option - the cost of relocating from your owned property to a new one can be far higher than if you were extending.
· Increased property value – properties with an added extension becomes appealing to potential buyers.
· Adding more space without relocating – having an extra space without stressful process of selling and moving.
· You don’t have to leave the area that you love, where you know the neighbors and have friends.
· You work with an architect and builder to create an extension of the right size and design for your family.
Cons
· ROI is not guaranteed for some properties which may be subject to restrictions that prevent them from being extended or converted.
· Expect everyday disruptions when the construction begins. There will be some disruption while the extension is being built – it’s inevitable.
· Trouble with neighbors – you will need to inform your neighbors of your extension plan and you may require a party wall agreement to continue.
· Rogue builders – you may have never needed a local bulder before and it can be tough to find a decent one. Check out our blog post for tips on how to find a great builder.
Selling your home
Pros
· Financially more viable - if you move to a cheaper location, this can actually prove more cost-effective for you or even help you make a profit.
· You have the freedom to find the right house in the right place – it just depends on its availability within your desired area.
· If you are capable of buying, you don’t have to experience any disruptions from builders.
Cons
· Moving house is expensive and the costs really mount up between stamp duty, estate agents fees, etc.
· Packing and the cost of physically moving everything could also add to the stress.
· You may be needing a bigger mortgage to fund your dream home with an extra space you wanted.
· You might be parting with friends in the neighborhood and extended family.
Final thoughts…
Selling your home can be a long and stressful process much like extending it -- both can take months to process. With the cost of selling rising and a housing stock shortage in the UK, a lot of people often choose to “do-up” instead to “sell up”. However, some people find it more convenient to move into a new house and start over entirely, while others would rather not sell it and do extend.
Both options should be considered and the final decision will truly depend on individual preferences and individual situations.