Would you do these improvememnts?

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This is a bit of a finance / property question. We live in a 3 bedroom victorian terrace in an area we love, which has seen house prices rocket since we moved in (not because of us I hasten to add!) We have 2 DC who are under 2 (not planning on any more). The primary schools where we are are really good, secondary not so much (inner city london).

I've recently come into a bit of money which is currently sitting in the bank. Our house would be greatly improved with the addition of a garden office (we both work from home) and the side return extension. If we did these it would use all the money that I have come into.

We love where we are but are constantly thinking about whether we should move a bit further out to get more space in the future. The problem is, in London you don't actually get THAT much more space unless you can afford a lot more.

So my rambling question is...Would it be worth us doing the improvements, even if we decide to move in say 5 years time. Will we always get that money back on the value of the property?

I don't think you'd get the same amount back that you invested as you're not adding an extra living area to the house - unless the garden room would be of interest to potential dodgy landlords or you happen to get people who also work from home - anyone else would see it as a bonus room but probably wouldn't want to pay extra for it.

But I'd do what makes the house work for you - five years is a long time and you'll benefit from the changes for a while even if you do decide to move in the future. You love the area you're in - how likely really is it that you'll move in the future?

I'd do it. No idea if you'll get your money back on the property, it depends on how much you spend & what your designs are etc etc, it also depends on the wider economy (which is out of the influence even of MNers!)
Alternatively, what else would you do with the money? Interest rates are low so investment wouldnt be much use.
We did something similar (not London) & absolutely love our home now.
Good luck!

I suppose it's nice to know there's money in the bank got a rainy day / nursery fees etc. I'm tempted to just do the improvements but am nervous about spending the money.

However like you say they're not gaining interest etc. plus 5 years in an improved home does make sense.

I'm guessing the bulk of the cost would be in the extension rather than the garden room, and that would be the bit that would add value. The garden room may not add a lot of value but it would still be an extra selling point if you came to move house. The only reason I wouldn't do the garden room would be if yuk have a small garden which will be consumed by the room.

I think I'm London you do tend to get the value back. You would potentially have five years benefit from it as well as increased capital growth. So I would probably say go for it. Only do it if you are sure you're not going to want to sell really soon though as the market does seem to have slowed a bit so you may need to wait a while before you get he return.

Good luck!

*yuk = you

*I'm = in

Auto-correct!

Apparently a garden room is only a good idea if it means that you will stay in the house and use it, they don't add value to the property.

An extension would I would assume - although it would be worth getting an estate agent around to give their opinion?

You would need to see what houses are selling for with and without the extension locally. Then you'd need to see how much it would cost to build to determine whether it makes financial sense. I'd imagine that in London it probably does.
Alternatively, not sure where you are now but there are some lovely suburbs in London that are relatively inexpensive - you could just move and be done with it rather than go through a project for a few months and then move quite soon anyway.

Thanks people! Good to get opinions and advice.

We definitely need to do the maths. That's what I was thinking JoJo, but for various reasons we can't move in the next couple of years. so we're going to be here until the children at least start primary school. Although that's only 3 years away.

Don't forget to talk to your accountant if you work from home, Could the money actually come off your 'earnings' for the year and essentially be VAT free - if you are umming and ahhing about the expense of the garden room it could make it a smidge cheaper

There was an interesting article in last Friday's Times, if you can find a copy, about the cost of extensions and improvements and what difference each makes to the value of the house. There's also a handy guide to what % of your spend to allocate to each one. Find it in the Bricks and Mortar supplement.

Thanks Clark, never even thought about that!
And brilliant Ocsock, will fish it out I have an online subscription.

I would have a conversation with local estate agents and ask their opinions - they know the local market best.
Are you fixed on a 'garden room' rather than developing the rest of the extension to include a home office? Would it be worth an initial consultation with an architect ?

In my part of London, a Victorian house that doesn't have a side return extension is pretty much considered a doer-upper and priced accordingly. It's just expected by buyers. If you have five years' worth of use and enjoyment out of it first, all the better. (And you may have many more.)

My one word of caution is think very carefully about its layout and the flow from other rooms - I've seen lots and, in my opinion, some people just haven't used the space that intelligently.

Garden room: meh, nice to have but a bit of an indulgence for many buyers. Certainly not worth it if it will make the garden poky or eat up a lot of the available sunlight.

I am not sure you get your money back on side returns (costly per sq fot) or garden rooms - however they will make the house way more attractive and you'll get to enjoy living there.

Have you gon into the loft? That would be better than the garden room.

Interesting lala. I know what you mean about use of space. I'm always worried about the second reception room becoming a bit of a corridor. Have you seen any particularly good one? Or uses of space that have been especially successful?

We'd love to go into the loft but can't because it's a conservation area.

You can go into the roof in a conservation area - normally either velux or mansard roof would be OK.

with interest rates so low, i would borrow /extend mortgage with the view that any interest/impact will be offset by increase in value / speed of sale and keep your lump sum for exactly as you describe.

The best one I saw had the kitchen in the "back parlour" and the large room created by knocking the original kitchen space into the side return was the living/dining area that it opened onto but that is only possible if there is not too much of a drop from that back parlour to the rear addition.

Generally what happens is that the house isn't wide enough to accommodate an island but people insist on having one and they just end up with this corridor up the side of it pretty much where the old bit of yard was which seems a bit pointless. Or they try to fit too much stuff in (sofa area plus utility room plus downstairs loo) and it all becomes a bit awkward. Or they let the builders leave these massive nibs where the steels go in that end up semi-dividing the space. Or they make it open onto the back parlour area and that just becomes a walk-through to get to the kitchen and also means the front parlour (which is very likely to have been knocked through) gets all the smells and noise from the side return room.

Have a good look at what your neighbours/friends have done. It's a lot of money to spend to do it badly...

We are in a similar position. Small victorian semi with the entrance on the side and stairs up the middle - we spent a year fixing it up from a real state - rewire, no central heating new windows etc but couldn't afford anything structural ie side return or loft. It's pretty much a given round here that as soon as you move in you do both! Now we have enough in savings to do the loft but it will leave us with nothing in the bank and that makes me nervous esp as DH is freelance. But then the loft would cost about 40-50k and add about 100k in value. I agree that the side return makes financial sense rather than the garden room, but if the garden room improves your life then also worth doing? Mind you, we have 5 houses for sale on our road ranging from 680k to 1.1mil and they have all been sitting there for 3 months which is unheard of round here...so improved or not they still ain't selling!

I recently spent all my savings on a building project. 6 figures worth. It was very daunting and had I known it was going to cost what it did and wipe me out I don't know whether I would have done it. So I'm pleased I didn't know because it's massively improved my house. However it hasn't put much value on the property. I was mildly disappointed by that but won't be moving any time soon. I do think I would have been a bit more cross if I'd been intending to move though. Plus don't underestimate the hassle.

That said working from home without a garden room is hellish so I'd get that done!

That's brilliant lala really useful to get your take, thanks for being so detailed!

Smell and Susie, it's good to get your personal experiences. It's so hard weighing it up because you can't put a price on your enjoyment of your house.

I think we'll start getting quotes for everything and see where we end up.

Out of interest if you had to do one thing. Would it be loft, side return or garden room?

loft. I think the extra bedroom adds more value v cost. Side returns look lovely and create a good space but they are sooooo expensive for the actual extra space you get. Having spent a year renovating, I've come to the conclusion that anything that involves digging costs 3x as much as you expect (shakes fist at soil pipe)

If you get a shepherds hut garden room then it can move with you (they can crane them over buildings and it goes on a trailer) – might be worth considering? I lust over these – www.riversideshepherdhuts.co.uk/ and I reckon they're the sort of company that would be happy to have a chat about whether their huts could be moved five years after they're installed. I also like the ones by Shire Houses and I reckon those would be moveable too.

I would honestly cost it out and see what you think would benefit you the most. Separating your work from your living area can have a whole host of psychological benefits that are difficult to put a value on, can be tax deductible, and needn't cost that much if you install something decent but basic rather than a very high-end product.

I understand what you mean about adding value to the house. I am having a similar dilemma of 'extend or move' and it's really difficult to decide. My head says that the sensible thing to do is to move from a financial perspective, but I love my house and my neighbours so I think we will end up staying and doing it up, even though it might not be the most sensible investment plan. I've been very, very unhappy in a previous house so I value what I have so much. What I'm trying to say with this lengthy digression is that sometimes there are a load of factors that aren't just about money.

Out of interest if you had to do one thing. Would it be loft, side return or garden room?

Loft.

You can use it as your office, and it adds a bedroom inside the house and adds value. Cheaper per sq foot than the side return.