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Renovate above house value...or not?(62 Posts)
Bought at £485k. Early 1900 house. .5 bedrooms. ..it’s liveable in but the work we want to do would make it ours, more liveable and nicer.
It’s totting up to about £200k in all worst case scenario including contingency of £25k.
That’s new pressurised cylinder, putting proper extension on back replacing old knackered conservatory, new kitchen, moving stairs to attic, replacing front door, 3 replacement windows, 2 new Velux, new back door, downstairs loo, painting and decorating throughout some skimming of walls.
mAx price for a newly done house in the road is about 560k.
We are wondering whether to not to the nice to haves, but they are the things that will make it nicer to live here.
I think it depends how long you’re planning to live there. If it’s a long term house and you can afford it, do what makes it work for you. If you’re going to be selling relatively quickly, don’t do it.
200k sounds a lot for the work. Is that for a high end extension and a bespoke kitchen?
Personally, I wouldn’t have bought the house in the first place as the numbers don’t stack up. Presumably, if you can afford 685k (price of house + work), then you can afford a much nicer/bigger house in the area?
can you hedge your bets in case you need to move in the next few years and do it in phases?
i see nothing wrong in doing the work to get it just the way you like if you're certain you're going to be there a very long time. however, we live in uncertain times!
If you’re planning on living there long term then I’d crack on. If only planning on being there short term I’d not bother.
Only spend this amount of money if you are going to stay a long time and reap the benefits. Maybe ask an estate agents advice? Just don’t expect to get all the money back if you have to sell.
I think that’s the dilemma, should we have gone for an already done house? It was hard to find one we both liked and this has location, aspect, space and we both liked it.
We don’t have any plans to move in the next 15 years or so...though who knows?
I’m half thinking we paint it all cream and put back on market and buy a done house.
We live in an area where building costs are high and we want to do it nicely and frankly it all adds up!
I've done this.
I'm about £70-100k over the Max price for my road and I do feel like I'm stuck. I still have about £50k to spend to finish my plans for the house (loft conversion and a couple of other things) but I'm feeling reluctant but also like I can't move so I have to do this work which will put me well over the ceiling price and mean I can never ever move without a loss. (We do need the extra bedrooms in the loft as new baby on the way and I have 2 girls sharing who hate each other 😩)
If you're really happy with the location and sure you want to stay there, do the work. If there's any chance you think you'll move in the short to medium term don't do it.
How good at DIY are you and could you save some money there?
You could just cut your losses and move on but it’s probably easier to get better quotes. How many have you had? Also, don’t just get one builder to do it all (at a massive mark up) but get separate quotes for the boiler, plastering etc from individual trades. If you do that, you’ll probably manage to spend 120k or under.
We'll be doing this. We have a small mortgage currently, and have the choice to do an extension that will be a bit higgledy piggledy but give us the rooms and space we want, or sell up and move.
The renovation will cost more than it will increase the value of the house, but will still have us better off than upgrading to a house with the features we want. We love the house, site and location so if we do the work we have no plans to move again.
We'll do the work and get the value out of it by living here for a long time, rather than by selling at a profit.
We bought a house in which the previous owners had done this. They bought it for too much in the first place, spent £200k on it and sold it 15 years later (to us). They nearly recouped their costs, but prices had risen massively in that time so in effect they lost a lot of money. The problem for them was that they were naive about how much of their money they would get back. It’s a different thing if you’re going into it with eyes wide open.
No way would I do this, it will take it too high and will be like a chain around your neck unless you're planning on living there forever, and the issue with that is that plans change.
We will be getting more quotes, but they are unlikely to be radically different. We know the guy who quoted and it was a realistic assessment to do it well, not cut corners and build in contingency for the inevitable stuff that crops up with an older house.
We were probably a bit naive when we first looked at it and thought we could do it for under a £100k. Which would still be over ceiling price for street but we'd have got it back by living in it for a long time. Talked to architect and a builder at the time, but now we are living in it we can see what else we want to change.
We are both useless at DIY.
I think I'd be happy to do it up more slowly, husband's view is just get it done and get the benefit of the changes.
Best laid plans... we bought our 'forever', three years later after renovating to our taste, we moved.
If you're not planning to move then fine in theory, but £200k!!! That's more than the cost of building an entire house so I don't think I could see that as value for money.
Go for it - you will then have a beautiful home which is exactly what you want!
Some of it is my husband looking at worst case scenario and he also wants top end finishes. I'm planning that it won't be that top end but do want to get the basics right. So more £120K than £200K if no nasty surprises and I can temper his enthusiasm when it comes to 'must haves'...
I forgot replacing 2 bathrooms in the original list.
Anyway its still going to take us way over the top price for the street.
As a wise friend once said to me 'contingency should just be called budget, you always spend it anyway' I don't know anyone who took on major house renovations and didn't spend their contingency, so bear that in mind. There's always unexpected (and usually expensive!) things that come up when you're renovating an old house, remember you're often dealing with 100+ years of someone else's bad DIY! If you're in the South East extending houses is a horrendously expensive business, particularly with builders so busy at the moment. As you say, you're not planning to move in the short term, but even if you make your money back it will still have cost you more than if you'd bought a house with the work already done, as well as the inconvenience and stress of living through the renovations. That said, if its important to you to have a beautiful home exactly as you want it and you can afford it then go for it! A beautiful home that you feel truly at home in is one of life's great pleasures. Just go in with your eyes open about the true cost.
We're planning to do exactly the same.
We bought (SE) in 2011 with a large deposit and smallish mortgage. House value has doubled since then.
We now have cash saved to afford to make the house work for us, and plan to stay long term.
The cost of the works added to the current property value will take the total over the ceiling price for our street.
But it will be cheaper than moving to a place that has the features we want.
And we absolutely love our house, street and community.
So even though it doesn't make sense on paper, we will achieve our dream home for less than its current sale value (mortgage+deposit+refurb costs = lower than current sale value).
I know that we're bloody lucky to have bought when we did and to have been able to afford the refurb without remortgaging.
It makes no financial sense at all.
Husband is already finding it stressful!
Paint it up and sell now while the market is good - you'll lose less overall surely?
You know that you need to get the quotes down in cost, then stay there for quite a period of time. Then the equation works. If both of these cannot be achieved then no frankly it doesn't work.
Depending on your location and everything happening currently in the World/UK it could take quite some time to get £200K back on a house now.
I have friends doing this and we find it batshit. Because if you added the cost of their house and the amount they would spend they could buy a house for that price and it would be so much more than they are creating. In every sense.
I’d sell and buy a seven hundred grand house myself.
How big is the extension - single or double storey? How much is the new kitchen? £200k is a ridiculously high budget. It shouldn't cost more than half that assuming a single story extension.
If you're planning on staying there and can do the work for £100k and you love the house and area it's probably worth doing. Moving costs thousands that you never see so that has to be added to the budget. In time prices will go up beyond what you've paid - but only if you're happy to be there long enough for that.
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