Two storey extension is it worth it

[NegativeNelly]

MENU
Mumsnet
Active discussions
My Mumsnet
Talk Property/DIY Create new thread
Below is a preview of your new thread.
If you have used any links in your post, they should be working correctly in this preview. You can revise your message and preview again or post your message.

Today 22:09NegativeNelly

Hi all,

My partner and I have lived in our first home which is a two bed semi for 2 years now. We have agreed planning to make it a 3 bed with a side utility room and downstairs wc and make the kitchen and diner bigger. We have had a lot of quotes which have been roughly £70k-£90k. We bought our house for £210k and the reason we're doing it is it's in a prime location of a good school, a coldesac , big garden not being overlooked and our forever home. However, when we speak to family and friends about it all we are getting is negatives. Like why don't we move? That's a lot of money. How can you afford it. Do you need it etc
We have looked and spoken to estate agents but houses in our neighborhood for what were going to build are rare and for just a 3 bed it's nearly £300k now so I feel like we'd make our money back. I was so 100% on it but now with everyone's negativity it's making me worried and anxious, like I've not thought about it enough ..
Has anyone else had this sort of extension and can give any tips? Would you regret it and wish you'd rather of moved or did you think it was the best thing you did so to speak?
Many thanks
NegativeNellie

Moving house is extremely expensive so a good chunk of that budget would be swallowed up with stamp duty etc.

However, it depends on the neighbourhood. Would the extended house fit with the surrounds? As you have looked at, it seems 3 beds do command a better price (bedrooms seem a key factor in in increasing value)

Also, would it mean you can remain in the house?

We extended our house twice. The last extension is probably one we won't get all the investment back, but we knew that at the time and have no intentions to move. However taken with costs of moving, we are still better off or at least break even point.

A word of caution though. Builders estimates are notoriously unreliable..and virtually always far less than what they end up as. Once you have plans drawn they will be far more accurate as if you are sensible you will have a detailed specification and contract (many don't). Our contract literally specified everything from every bit of work, reference the version of the plans, payment schedule which included a 20% holdback of final payment until the building control certificate had been issued with an additional 2 week period with ourselves as the client satisfied.

Even so I would suggest at least a 20% slush fund for unforeseen work.

We were really happy with our builders who were extremely professional but friends have had nightmares...them trying to cut corners at every opportunity

Location is the most important thing.
If you can create a bigger house in that location, it's worth while.

But... Extending is bloody hard work, we're nearing the end and I don't regret it but wouldn't rush to do it again. And I don't have small children - do you?
Biggest irritation (apart from dust and mess) is having everything from the rooms being worked on crammed into the rest of the house, we are in a decent 4 bed house but every room is stuffed with boxes of kitchen stuff and random furniture.

Get an estate agent to value your house as a three bed.
Get realistic estimates for the work, then add 20 per cent

Hi all, thanks for your comments all I agree on.

I went to my bank this morning and they have unfortunately said no they can't give us it due to not enough equity. I was confused by this as when it is done it will make them double the amount due to location, size etc. So I really don't understand it especially as we have no debts, no bad credit never in negative in savings or accounts she didn't even want to see all that she just said no.
Can anyone advise? Or think I should go back? I really don't know why they make it so hard for people ...

What is your current LTV? With regards to the bank, they only lend based on current value and usually will only lend up to 85%-90% of the house's current value. You might have to stay in the house for a bit longer, pay more off in that time and then borrow back that amount to do the work or if you are lucky prices will go up in your area pushing you into a lower LTV increasing the amount you can borrow.

Have you tried with mortgage broker as they will have more knowledge of different lenders? On our recent remortgage, we used London and Country. We would have preferred to go to our lender at the time as it makes things easier, however, even with our 60% LTV, we knew we wouldn't pass affordability as one of us had gone part time and now with a dependant so a drop in our household income to throw at the mortgage. However, different banks measure affordability differently. This is where brokers come into their own. They will have an appreciation of the different intricacies of the lenders.

Also the other thing LTV related, Nationwide valuation tool returned 58% LTV, coop 60% LTV and HSBC 63% LTV. Obviously you can imagine, we went with one of the former lenders as interest rates were lower.

Yeah I think we'll have to go to a broker. I'm just disappointed and concerned that a bank turn away a young couple who have a £185k mortgage with them, who have paid off nearly 20k of it now. Have no debts, no bad credit , no car on finance etc never on negatives on card etc, have savings. A two bed house in a very good area with local schools nearby, huge garden, driveway, coldesac houses going up to over £300k for a 3 bed. And yet because of all this! They can only give us £20k I just find it unbelievable. What a way to support good customers and the funny thing is the loans are in our names so they can agree for us to have a nearly £200k mortgage but it's a no for a measly £90k ..

Brokers it is then...

Thank you for your help

I'm a bit confused. Unfortunately you cant just borrow money against your mortgage on the risk that building work will increase the value, you can only borrow the equity you already have. So basically you borrow back money you've already paid off the mortgage. Disappointing if not what you expected.

Could you do it in phases and increase the value of the house in increments, as well as overpaying your mortgage along the way? So for example take the £20K and maybe a personal loan, put the foundations in to support a two storey extension, but only do the ground floor extension. So your house would be worth a bit more maybe. Then add the second storey in a few years?

You'd need to plan very carefully to ensure the value of the work you do keeps up with the value of what you're borrowing though.

I asked if this was an option with her and she said they advise against it as it's half completed and not only can be costly but can be difficult for builders and could possibly devalue the house if anything if work not completed. I just don't really understand it like it's our loan so surely as long as you can pay it back I don't get how it's a problem.
The value would be twice as much going by the housing market and houses round my area as it's a prime location but this would be our forever home anyway.

I was just thinking about posting something similar to this.

We currently have a small two bedroom, very dated and need a lot of work. However we have a huge side plot. We bought the house knowing we’d be extending it and any time you tell someone it’s ‘oh why do you want to do that?’ ‘why don’t you just move?’. I’ve come to the conclusion that some people really do just want a ready made home they don’t need to touch but we are happy and excited to do the work, see the house grow etc.

I always look on Rightmove and have seen a couple of new builds (but preowned) that are the perfect size for us and I do think are we doing the right thing here? We could move into a house that doesn’t need a thing done instead of all this hassle.

I really don’t know what to do. Our street is really nice and quiet but sometimes TOO quiet. There are no young families etc so it’s quite lonely at times.

OP you bought your house 2 years ago. Say its worth £210k and you owe £185k on your mortgage.

You've asked to borrow £90k so you can extend it, and then it'll be worth £300k. You'll owe £275k then. Sounds great.

However until the house is finished, its only worth £210k. You're asking the bank to give you £275k secured against a property thats only worth £210k. The builder could go bust, you could lose your jobs, one of you could become ill - the bank repossess the house but its only worth say £240k - the bank wont take that risk.

We lived in our house for about 7 years before we extended - value went up & we paid down the mortgage. When we had built up enough equity to finance the extension, we remortgaged to release the money.

Africa is right... your numbers dont stack up unfortunately

Same as the others have said, the numbers don't add up.

We also live in a two bed semi with a good amount of land to the side so we can extend. We have lived here five years and have about £30k in equity. We have just remortgaged at a very low rate for another five years and after that, when we have (hopefully) more equity and have paid more off the mortgage, we will have enough in equity to extend.

You can't expect the bank to loan more than the house is worth currently / if you don't have the equity.