Am I insane

[Bodear]

To consider buying a property that is at the top of our budget, is too small for us (only two of us but we get lots of visitors) BUT has planning permission for an extension and is in my absolute dream location.
Oh and we’ve never done anything to a house before apart from a lick of paint.
Please tell me I’m not.

How will you extend if you don't have any more money to spend?

We’d have to wait and save. Both of our careers have decent earning trajectories but not incredible.

I think probably 2 years before we could do the extension.

What would you do if house prices fall and interest rates rise?

I’d say go for it(!) Location is so important. Plus I always think you need to live in a property at least a year before you do any major renovations to it. Good luck!
Nb - we’ve always bought at the top end of budget too...it always works itself out.

This is basically what we did... ended up saving for 3.5 years, but we are currently mid build!

Oh, and location is everything 😉

I agree with Henlie

Once you've bought, you can save and alter the building - particularly as you know the space is there and permission has been granted once for an extension - but you can't change the location.

Sounds a very sensible plan to me.

Financially it always makes sense to buy something you can add value to.

@gungera
If on a long term (5-10yr) fixed rate mortgage and don’t need to sell, does it matter a great deal what house prices do?

@Mildura potentially not, I'm just thinking about the things that I would consider before doing what the OP has suggested.

You were all supposed to say it was a terrible idea!
@gungera we would have a fixed rate the only reason to sell would be some kind of disastrous life event which we’d have income protection against.
@Louisaellen how’s the build going?

It’s a beach front location so they don’t come up often and certainly not in our budget. I’m nervous of doing an extension though. Neither of us have done anything like that before.

The planning permission might have a 3 year life span before you have to apply again. Check that out. Planning policies change so there is no guarantee you would get the same permission again.

Try and reduce the price but you cannot beat location.

It's not too small for the two of you.Until you have saved enough for the extension you have a bit of land and visitors can camp.
Go for it. Get a fixed rate mortgageto protect against a bit of Brexit volatility(ups and downs in price are irrelevant if you're buying a home with long term plans).
So another yes!

Do it!
It’s worth it if you have long term plans and want a home

It's on a beach front?
What are you waiting for, snap it up?!!

Can't see why not - sounds great!

To think about
How often do you have visitors that stay and how important is that to you? How small and will you need to store your own things or drastically downsize? Have you had an approximate quote for the extension?

Do it. Buying st the top of your budget isn’t a bad idea. You’ll be able to extend the mortgage to build as your salary goes up.

A couple of years will give you time to save, decide what you want and check out decent builders. It’s exactly what we are planning to do.

Do you know how big the granted extension is? From that you can guestimate the cost of it and then you'd know what % of your salary you'd have to save to afford it in say 3 years. Best to buy with your eyes wide open. PP make a good point about planning lapsing and the same not being granted again.

We’ve moved away from friends and family so it is important. We currently get a couple of sets a month. We could put people in a single room and the open plan lounge/ diner/ kitchen. The kind of arrangements I’d have been more than happy with for friends when I was in my 20s but maybe not great for our parents or friends that have kids. Do-able but not ideal.
There’s only one bathroom plus extra wc which is fine.
We haven’t had a quote for the extension and I guess that would be the next step.

Planning rules here state that we’d have until 2022 to get to the level of the roof of the ground floor. But I guess we’d have to consider if the plans are what we’d really want or if we’d want to change them.

Planning permission takes it from 75sqm to 165sqm.

For anyone that’s done a major extension (extending the ground floor and building a 1st floor), how bad was it? What should we think about?

Thanks for all your comments. It’s great to have a sounding board.

If it's beach front, are there problems with coastal erosion, high tides etc
Climate change is only going to get worse...

Buy it! We bought a scruffy little bungalow (untouched since the 50s - old style plug sockets, hideous and grubby), but in a great location. We saved money, extended and renovated over then next few years. It's been a lovely home now for 16 years and is worth loads more.

All going well so far @Bodear! One or two unexpected costs, but we are still on track budget wise... you will need to have a little more money available than the expected costs for this very reason. I’ve never done anything like this before, but get yourself a decent builder who can project manage and you’d be fine 😊 I’ve attached photos of the build so far! I say do it!

Depends where in the country you are and value of the house.... that extension could cost 200k plus, building near the sea is rarely cheap due to having to go deeper for foundations
How far above sea level would also be a major consideration for me

When calculating extension costs allow for paying for alternative accommodation (at least for a while) if the build is radical