Would you extend house/add to financial burden now?

[ExtensionProcrastination]

I'm going to lay out the bare facts and see what others think.

We are in our mid-50's with one young teen. £100k on mortgage, costing £1k per month. Generally save £500-£1000 per month.
Pensions not great for various reasons so have stepped these up massively in the last year. Likely looking at 100k in each by retirement.

We have 50k towards an extension (inheritence). To do what is planned will mean adding 40k to the mortgage. This will = £400 per month.

Plan is to host foreign students. On paper we can afford the mortgage but income from students would give us extra security and savings.

This was all ready to book in the diary two weeks ago but the world is a different place now.

So my question is, would you look at adding that sort of burden to your finances when the price of the build is likely to go up and general costs will squeeze us into needing the income from students?

Other ibfluencing factors: young teen has ASD so I can't guarentee he will take to students, could love it, could hate it; both cars are 15+ and plan was to only replace one: if we need student income, we'll need two cars.

Instead of foreign students could you add a large self contained studio and rent that out?

No, we wouldn't contemplate doing that. This was never about making money: the idea of getting students was only ever going to be an add-on bonus. It was affordable without the students a month ago; now it is all too precarious.

A lodger was never on the cards as that really would feel like an invasion of DS's home so I was only ever happy with the idea of students if we didn't need the income so could be stopped.

Currently we eat on the sofa in the lounge.

I've worked out that by shifting the kitchen wall 60cm into the bedroom next door we could fit a table in the kitchen and the bedroom would still fit a single bed, desk and wardrobe in.

I think I knew which way I was leaning, I just needed to get a bit of a poll as to what others might think as my family and friends are probably sick of hearing me say "what do think of...." 😆

No. House prices are dropping. Materials costs are spiralling. Energy costs are about to spike due to Iran war. If either of you lost your jobs now in your fifties there’s no guarantee you’d work again. Focus on pensions not short term comfort (teen will be leaving home in less than 10 years)

Could you reduce the size of extension and just make it a kitchen/diner/snug? make it for your family, the students don’t sound a good fit.

This is where I have got my mind to now.

I keep thinking of Love It Or List It or one of Sarah Beeny's series that looked at how to reconfigure the house you have to make it work, rather than thinking it doesn't work so I must need an extension!

Using our current footprint and shifting the wall across will give us a small kitchen diner. We have a big lounge, so it's more than a lot of people have and it means we can add more to our pensions and take our son on a decent holiday or out for a meal/day out once a month.

How old is your dc? I wouldnt plan any building work or refurbs during critical schooling exam years (so if it were me I would avoid doing anything during y10, 11, 12, 13), with an ASD teen in the house. We had all our windows replaced (took about a week), but we scheduled it for the summer immediately after GCSEs.

He is 12. Everything points towards us refurbing the current footprint. It would only take an increase in costs or one of us being ill/losing income to potentially be living in a building site for who knows how long.

I think the small refurb will happen. Even just thinking about it becoming a reality has made me feel excited and happy that we can afford it outright vs. how I feel if I think about increasing the mortgage.

I agree with doing what you can within your budget rather than taking out an extra mortgage.
Building costs have rocketed so if you were to extend it is likely to cost more than you are given as an estimate.
Reconfigure what you have and maybe a new kitchen and some decorating. That way you can have something nice and new at home to enjoy without extra borrowing and stress of extensive building work. Also you won’t have to share you home with strangers.

I definitely wouldn’t be taking on any further costs right now.

With an autisitc teenager I wouldn’t be considering bringing in strangers. Home is his safe place and you don’t know how he will find the exam years.

Yes, I agree. I'm glad I started the thread as it feels like the doubts I had were logical and valid, especially regarding the potential impact on DS.

We are moving ahead with the refurb of the current layout with appointments with kitchen designer and structural engineer in the diary.

I've lived in a doer-upper before when we ran out of money and had to spend years finishing it out of each month's salaries. Fine when you are an adventurous newlywed, but I feel so much more relaxed knowing that we have the money to do the smaller work, with leftovers for unexpected costs.

OP I don't think I'd do it ATM. There is too much going on globally. Who knows how much petrol and fuel will go up? Unemployment is steadily rising. It's now over 5 percent. Things are too volatile ATM. I'd put £20k in an ISA before April 5th in both names so £40k. Then on April 6th the rest can be put into ISA. If you go on to money saving expert website you can click through to Trading 212 and get 4.68 interest for 12 months. I'd put it in there and see where you are in a years time. I put in £20k and I get £2.52 per day interest.