If there’s a recession, high inflation etc should I stop my plans for house extension?

[Mydoghealsmyheart]

I really don’t understand about inflation, recession, high interest rates etc but I’m wondering if I should pause my plans for building plans for an extension, new kitchen etc? I know that building costs, materials etc will cost more so I don’t know if I should stop our project before it’s begun. We have very limited funds and I am so worried that we start something and then cannot afford to continue.

We stopped our project earlier this year. The estimated costs had gone up by 50%. We are very glad now considering the increases in cost of energy and interest rates. Make sure you can afford to heat and pay council tax on your bigger property before you start.

I dont think council tax bands can change for extensions etc until a property is sold can it? I think it depends how much you need the extra space and what value it will add in years to come. You may spend a fair bit on it but if that means the value increases by more than that then you might end up getting a better ltv and so a better mortgage rate. Wages etc might catch up eventually after a dip, but building materials never really go down. House prices will more than likely stall for the next year or two, but nearly always go back up in the long run.

I’d wait. I reckon prices for building work will go down over the next year or so as there’s less demand for trades. Kitchen companies will be offering big discounts too. You could save a lot of money by waiting.

We’re just about to take the difficult decision to halt our plans (2-story side extension in Surrey). We could just about afford it with the predicted energy rises released in July but the updated version about Octobers price cap has meant we’ve had to pause. We can’t risk not being able to afford the basics which is what would likely happen if we continue. We were a month away from starting but will now cancel.

If this isn't absolutely necessary, then no, do not go through with it. The reason so many people in the affluent West are in deep water now is because they thought maxing out their purchasing power to afford that big house or car or whatever, was a good idea. If I can comfortably afford £500/month, then I can maybe stretch to £600 or £700 and still have some buffer... or so people think when they forget that circumstances change. If you are only just able to keep things on an even keel now, how will you deal with 13% inflation and more for potentially a couple of years?

So anyone who got a mortgage right at the limit of their discretionary income threshold and didn't get a nice long fix on it, is now potentially going to be underwater because they didn't factor that in. Yeah, you could afford to go big, but why not moderate your size and have a nice sum leftover for emergencies?

I know so many people who fell into this trap, by design of the system of course, and have had to hand back the keys of whatever they went and invested in when things only got moderately more pricey.

We have very limited funds

There's your answer then.

Unless you live in a sub-par kitchen, whatever, don't waste money on upgrading a perfectly decent house.

Build up a buffer.
Cos the shit is going to hit the fan money-wise going into the autumn/winter.

Food and gas/electriciy prices rising, war in Ukraine, China rattling its cage over Taiwan, supply chain problems (longer waiting times and rising prices on renovating and professionals' wages.....)

Interest rates rising, has a trickle-down effect on everything, everything is in flux.

We are living in "intersting" times.

I'm putting a build on hold .
It doesn't feel the right time with the economy the way it's going

Everyone seems to be echoing my thoughts. I’m going to trust my gut feeling and speak to DH about putting everything on hold. Fingers crossed he agrees!

Don’t do it. We’ve just been through hell with building through the past 18 months with shortages, massive price hikes etc. it’s been awful. Now we are going into a period of recession and inflation that we’ve not seen for a long time with interest rates gonna up tomorrow and then in all likelihood in another few weeks going up again, oh yeah and a fuel crisis and general cost of living crisis to boot.

People lose their homes in times like these. Just put the plans on hold until we are out the other side or you at least have more of a buffer built up.

Saving is imperative right now, not splashing cash on unnecessary things which an extension seems to be

Definitely defer if it is an extension and it is not necessary.

We are entering a new era. All the ingredients are there for a fundamental change to the way we have known life over the last 30 years. In the same way there was a change then to the previous 30.

Polarisation of societies and economies
End of quantitative easing
Slower economic turnover

Thank you so very much to everyone for taking the time to message. It is truly frightening times, isn’t it? I think we will have to do a few diy projects here and there but nothing more. I was reading earlier on a different thread about the best, cheapest way to stay warm at night in winter. It’s suddenly feeling very real.

If you need it and can afford it without borrowing, then go ahead asap, because if you wait, prices will go up further (and much faster than you can earn interest on money left in the bank). But if money is tight, don't do it.

We applied to demolish and rebuilt our house at the same time as our friends c2006
They got planning first, demolished and started building just before the crash. House was up, roof on, windows in super fast.

We didn't get planning until after 2008 and build prices were so much lower, took us years to finish but friends house is still a shell.

Good example a huge hand cut sandstone fireplace surround from a quarry cost us £1,300 in 2008, the matching hearth stone a few years later when things had picked up cost £1,500.

Accidentally waiting really paid off for us.

Just to add, we’ve had to get our two story extension re costed as previous builder went bust (just before we transferred deposit). Our job went out to tender 3 weeks ago - builders are biting our hand off. We’ve got 9 builders working on quoting currently. A sure sign they know what’s coming. When we first got the extension quoted in November 2021 they wouldn’t respond at all.

See we've been advised by a financial adviser to go ahead ASAP with our extension as the money we have sat waiting to do it is loosing value as the price of things go up. Ours is necessary (I would say). Our kitchen is 1m x 2m and has no space for ANYTHING. Having more space will add value to house and improve our living immensely and increase the LTV. I would say if you don't do it now you probably never will as the money won't cover it in a few years time as prices rise.

Inflation is certainly a factor and if you easily have enough money then I’d agree to go ahead but the lack of certainty around anything means that for someone in the OPs position it’s a foolish move

Wooooah! no! Inflation means you need to spend £ you have - it’s losing value!

If I were you I would crack on with the extension asap. Things are going to start costing A LOT more in the future. Get a contract with prices locked in. Now.

We are entering a new era. All the ingredients are there for a fundamental change to the way we have known life over the last 30 years. In the same way there was a change then to the previous 30

What change happened in the previous 30 years before the 90’s? Do you mean the 70’s? The 80’s weren’t very different.

im 58, I’ve never known anything like this.

i know some are saying to proceed asap with the project to beat the inflation but we are still waiting for planning approval so without that we cannot get any quote as the planning approval will determine precise requirements for type of work etc. it means we’re in situation where it’s impossible for any builder to give us a quote even if we and they wanted to. I don’t even know what this latest interest rate rise will mean to our mortgage repayments. The project may be wiped off the table!

We're putting our plans on hold. Not a big extension, but a big kitchen refurbishment project and knocking down walls. We'd like to get it done, but the kitchen is perfectly usable in its current state so there's no need to be paying massively over the odds for it.

We've been discussing this recently as we either need to extend or move. The cost of houses that would suit are FAR more than the cost of an extension so we are going to bite the bullet and go for it. Our trusted builder we've used before does not want the job, so we're looking for a builder. Heard so many horror stories though it's making me feel very anxious ☹️

We are in similar position. Waiting on final plans so architect can submit for planning and builders won't quote until we have our pack of drawings, including structural engineer as we are knocking walls down.

Our kitchen is easily 30 years old (we bought a house earlier this year) and is falling apart. The conservatory attached to it is so hot in summer and cold in winter its un-usable and the heat comes through to kitchen meaning the same for there. We really need our extension doing and have the cash set aside (losing value obvs!) but am nervous.

If your funds are right I would wait. I’m progressing with various improvements because I can lock in prices and have the cash already. But if you can’t withstand increases over the course of your jobs - don’t start them.