Worried extension will be a mistake

[JemTheAngel]

We are in the process of remortgaging and were going to increase our mortgage to extend and create a big, open plan kitchen. We had our house valued before we started the process. Local estate agent valued house within a band. We are now part way through mortgage application and two valuations have come in much lower than the local estate agent valued it at. (The higher of the two is 10% less than his worst case scenario/fire sale valuation).

I'm now worried about spending extra money on the house and never recovering what we spend. The local agent reckoned we would add significant value but I'm now nervous about his view. Equally, it is a difficult property to value and we aren't doing it up to sell, its very much the house I'd see us staying in until our children have left home and we think about downsizing for age reasons, so the extension is to make it our perfect home, not for anyone else's benefit.

What do people think? I don't want to make a bad financial decision and this whole process has made me worry that there is something wrong with our house. But in the area there is a massive shortage of family housing, so moving isn't really an option even if we wanted to.

What does Zoopla say?

If you are comfortable with the figures of the remortgage and excited about improving the family home then I'd say do it! If you plan to stay there for years and only move to downsize then I wouldn't worry. Were the valuations done by estate agents or as part of the mortgage app?

Zoopla is extremely unreliable. Mine is 40 grand out (verified by recent valuations).

Zoopla values it at 25% more than the surveyor's valuation. I've asked for details of the survey to see if there is a reason it came in lower than expected and I'm waiting to hear.

I've not put in exact figures for privacy etc, but we're south east and the figures are all around the 500k mark.

We had it valued independently first by a local estate agent, ideally to have avoided this situation! I think Zoopla is unreliable, especially for relatively unique properties. It comes in at 45k higher than top range from estate agent.

I'm not sure I see the problem: you are planning to stay there for a while (rather than trying to 'do it up' for short term profit. The extension is designed to suit you, who will be living there. There is a shortage of family sized property around, so you would probably have no trouble selling it eventually.

In that position, I'm be feeling grateful, not worrying about the value. Say you stay there 20 years, work out how much it will have cost you each year. Will you get that much value out of having it...Sorted.

Unless you are doing something that you cannot imagine any other family ever using... I tried to think of an example but cannot imagine anything bad enough. Enjoy.

Thanks Finally - I think you are right and I'm sure that's how my husband will see it. I guess my concern is to make sure we would be able to sell if we had to in unforeseen circumstances. But I'm probably being over cautious.

Silly way of looking at it if you have no immediate plans to sell and have some equity cushion in the house.

Do the extension of that is how you wish your house to be and if it will improve your day to day lives.

Just ignore value at this stage and make it the nicest it can be for your family to live in. Why plan for unforeseen disaster if it disadvantages you so much?

Thank you, I think you are all right.

I hate the whole mortgage process, I find it all so stressful.

Why have you got two valuations as part of the re-mortgage process?

I think estate agents are usually optimistic, surveyors are usually pessimistic. The achievable value is likely to be somewhere between the two.

As others have said, if you are there for the long term, and you're extending to suit your family, then whilst you don't want to be in negative equity if you were forced to sell, value is somewhat immaterial.

We were going to spend 80k on extension, both estate agents said it would add 20k tops value due to ceiling price in area. We sold and spent the money getting a bigger property in a nicer area. Best thing we did.