Renovate above house value...or not?

[GolightlyMrsGolightly]

Bought at £485k. Early 1900 house. .5 bedrooms. ..it’s liveable in but the work we want to do would make it ours, more liveable and nicer.

It’s totting up to about £200k in all worst case scenario including contingency of £25k.

That’s new pressurised cylinder, putting proper extension on back replacing old knackered conservatory, new kitchen, moving stairs to attic, replacing front door, 3 replacement windows, 2 new Velux, new back door, downstairs loo, painting and decorating throughout some skimming of walls.

mAx price for a newly done house in the road is about 560k.

We are wondering whether to not to the nice to haves, but they are the things that will make it nicer to live here.

It’s primarily your home, not an investment. (If anyone recommends you invest all your capital into one companies shares, you’d not do it. Yet people see their home as their only investment).

So IMO what you’re really asking is, “would you spend £100k on treats and nice things that you’d enjoy for 10 years?”. Answer depends on how much money you have and how much you’ll enjoy it, and if you’d get more joy from spending it on something else (or saving it!).

Some costs you’ll incur anyway (new windows don’t sound optional).

@Saz12

It’s primarily your home, not an investment. (If anyone recommends you invest all your capital into one companies shares, you’d not do it. Yet people see their home as their only investment).

So IMO what you’re really asking is, “would you spend £100k on treats and nice things that you’d enjoy for 10 years?”. Answer depends on how much money you have and how much you’ll enjoy it, and if you’d get more joy from spending it on something else (or saving it!).

Some costs you’ll incur anyway (new windows don’t sound optional).

Exactly this. We'll probably spend more on renovation than we'll get back (albeit talking about 1/10th of your spend!), but I don't see my home as an investment in that sense. I'm building up equity by paying down the mortgage and that's fine with me. I'm spending the money so that I can enjoy my home more while I'm here - getting "reimbursed" for it come selling time doesn't really factor in.

That quote is high. We have just renovated a large 5 bed (3000 sq ft) Edwardian house in the south east. We didn’t extend but we did take out a very large chimney breast And stack from top to bottom in order to do the kitchen diner, plus new kitchen, 2x bathrooms plus 2x WC, carpets and decorating throughout, sanding all floors, extreme painting and decorating (removing all woodchip and lining and painting all walls), installation of 2x wood burning stones some repair work to windows. Our spend is at about £110k. We’ve definitely gone for a high-mid range finish, and have had some original features restored (some cornice and all woodwork templated to match original). I think as a rule of thumb if you can roughly break even on your expenditure when you complete the work that’s ok. Having said that we would need to sell for close to £1m to recoup on this

The problem is with high end finishes you only get the value from them if you live there long term. Also, your contingency fund seems quite low. When we've done up houses you always need more than you think you do unless you really keep on top of the figures. If you are going to do it up I would do what is absolutely necessary AND will add value and leave the rest. In your position I might just paint it, make it really nice and sell it on

We had a basic 3 bed semi detached house with a good amount of garden to the side and rear and doubled its size with a wrap around extension. We had the old part renovated and ended up with a large, modernised house.

We won't move again, so we had many extras including air conditioning, under floor heating, electric velux windows, electric garage door and all the fittings and appliances to make it the house we really wanted.

We went over the market value but have the dream home we wanted, so no regrets at all.

It would have been different though if we were planning to sell it to try and make money, so it depends what you want to get out of it really.

house prices are going nowhere in the next few years so save your money.

it's amazing what a lick of paint and some new curtains will do.

and never spend more than a house is worth. you will never get your money back

Lots of food for thought, thank you.

The extension is a single storey one - it does involve quite a big steel across the back of the house.

We aren't trying to do it up to make money or turn it round to sell. We want to live in a nice house that works for us.

We will be adding value in other ways - in that the house will become more usable for a family than it is now - but possibly not in ways that would be immediately obvious when we come to sell. In that it'll have 2 large attic rooms with a stair case you can get furniture up rather than the current incredibly steep staircase that's behind a door and a wall.

There'll be a usable room rather than the current stifling/freezing conservatory. And the hot water cylinder will be big enough to run a bath and do more than 3 showers in the morning.

I think your problem is not that you need to do the work... but that you are considering spending so much on a very high end finish on a house that won't be worth that much. I think you should cap the budget at 100K and see what you are prepared to give up to meet that. It is amazing what you can save money on if you are creative e.g. ex-display kitchens etc. If you like the house and want to live there at least you will probably get this 100K back when you sell. Moving is horrendously expensive and money wasted really unless you really need to.

I’d do minimal work if selling on. Just smarten up. New kitchen and front door, skimming and painting.

Leave the windows and conservatory if manageable

Neighbours of ours have done this - they’ve overimproved by $175,000 (AUS) compared to the market price and can’t afford to move.

They’re stuck in what’s realistically a too small house, in a location that no longer suits. House prices are starting to drop here so it’s only going to get worse for them.

We lived in a house that was convenient for my ex's work and schools but it was too small. We converted the loft and we had an extension on the back. We ended up with a really nice house which still was not big enough. It only had one tiny bathroom and no garage and parking was a problem on the street. We had room on the drive for one car but had to fight for space every day.

When we finally did move we did not get back what we had spent on it and consoled ourselves that we did it for our pleasure.

If you need to spend 200k then I think you need to move.

What is the split of the £200k budget and is the extension single or double storey? Do the done up houses have high end kitchens etc? You can get perfectly good kitchens from Howdens, DIY kitchens etc. Bathrooms - even if you can’t do DIY, you can save a lot by buying your own bathroom fittings, likewise investigate windows and doors - there are huge variations in what you can pay.
Look at your nice to haves- are they really that essential - eg boiling water taps cost up to £1k but a decent kettle can be had for £40

Oops, sorry, didn’t get to answers on page 2!

The works all sound sensible. The problem is the high end finishes I expect. Are you trying to make it look like the sort of home you read about in the Sunday supplements?

If it’s the family home for the long haul then I definitely agree with the poster who said you have to flip the question: is what you’re doing going to give you £10k of enjoyment a year?

If you’re planning to stay long term, then go for it

I say this as someone who had been in their home 20 years.

When we first moved in, we had to replace s the boiler (large hiuse, pricey job). We replaced the kitchen, moving water and gas about the room

Replaced the driveway as what was there was not laid correctly and had no drainage

Replaced the patio for same reason

Repainted throughout as horrid colour scheme

Well. That was 20 years ago

flat roof extension needed new flat roof, it happens

House needed painting - it happens, regular maintenance but it’s pricey

We have redone the driveway as our kids got older and we needed more parking spaces

We replaced the now outdated bathrooms

Decking cane into fashion, so redid patio with decking

Replaced carpets as now what was there is old

We undertook 100k work on going open plan, moved kitchen to other side if the house, bifolds, underfloor hearing, new boiler. Etc

So over the 20 years we have had the house we have spent much more than we will get back even though the value of the house has gone up. If you plan to stay long term, you’ll have gotten your money back in enjoyment and you will help with increase in value. Don’t look at it as solely about money in = resale value. Some if what you’ve listed is also maintenance.

@Saz12

It’s primarily your home, not an investment. (If anyone recommends you invest all your capital into one companies shares, you’d not do it. Yet people see their home as their only investment).

So IMO what you’re really asking is, “would you spend £100k on treats and nice things that you’d enjoy for 10 years?”. Answer depends on how much money you have and how much you’ll enjoy it, and if you’d get more joy from spending it on something else (or saving it!).

Some costs you’ll incur anyway (new windows don’t sound optional).

This is why home owners don't maintain houses, they think about recouping costs when it's sold. Houses needs maintaining

I also think I would group the work into things that need to be done and things that are nice to have. The hot water cylinder is money you can’t see but will have a positive impact every day. So that would be high on my list. The kitchen too - I cook a lot, but I would be looking for compromises. It might be that you have to do that extension though. The stairs to the loft? That sounds like a nice to have. Unless there is no staircase there at all.

It sounds expensive to me. We are in the middle of doing a 2 storey extension in the SE. The build cost is £120k for 60 sqm plus extensive renovation to the existing house. It is quite high end, vaulted ceilings upstairs, lots of glass, aluminium windows, underfloor heating. The kitchen, flooring and decorating is on top of this though.

I think builders may now be charging more than they were last year. Any extras seem to be charged at vey high rates and other bits of work that we have tried to arrange ourselves have been met with limited interest and sky high quotes. Builders have told me that everyone is wanting to do up their houses at the moment plus prices for materials have rocketed.

The stairs to the loft is a nice to have....but the benefits are that we will get a usable stair case that we can get furniture up and can be used more safely. Current stairs very steep and impossibly tight turn.

Added bonus Is it will bring a huge amount of natural light into an incredibly dark upstairs hall.

TBF we could live without the extra light and they are rooms that we won’t use much.

One thing to take into account is where is the money coming from?

If you had to sell in 3 years time, is the money all on a mortgage/loans?

I would never live in a house which I couldn't sell due to loans against it, and then have to continue to pay off those loans once the house is sold.

I understand you need to have a nice house, but I would start again adn look at where you can compromise. What are your high end finishes? Is it most expensive bathroom suite and tiles? Then change those for more basic, and spend the money on immaculate finish with those, will still look beautiful. Fancy, expensive waterfall taps etc are not necessary and those types of things will add up over a whole house/extension

When we moved into this house we had a zillion ideas for things that could be done. We had the structural engineer in within days to talk through this and that. He was great but really to the point in that he said he would draw whatever we wanted but that we needed to think about how much we wanted to spend because some of our ideas were just not a great return for the cost. In the end we did the things that made a big difference to our everyday life. I didn’t get the big remodel of the dark and broken up hotch potch utility/wc space that I wanted. We ended up with the solution that was right for the house and right for us, most of our money was spent on things and spaces we use all the time and that we live in.

A light landing is a lovely thing, but maybe you can experiment with light bright paint. In our old house we painted the hallway timeless and that made a massive difference. This hallway is lighter so we’ve gone a touch darker (but not much). But when we moved in every surface of the hallway (walls/floors/ceiling) was dusky pink. It’s incredible how much difference better paint colours and good lighting have cost

Your house sounds similar in age and size to houses in my area.

One of my neighbouring houses has the narrow steep staircase as you describe. It feels quite unsafe so the rooms up there are largely unused.
Another has a proper staircase and the difference is huge. But they have a lot of visitors to stay so decent access to these rooms is important to them.

No-one here spends on a high-end finish for kitchens, bathrooms etc. though.

And once they move here they tend to stay for many years so it makes sense to do the improvements. The only other houses with that amount of space are new builds on an estate and not everyone wants that. Maybe your area offers more choice.

The fact you're thinking about it in terms of the top value of houses on your street, suggests you will always feel annoyed at knowing you've exceeded the ceiling price of the street...and this will diminish your enjoyment of the house, however nice you make it.

I think you need to decide a top budget which keeps you within the ceiling price of the street (only works if you can be very strict with yourselves and in full co troll of costs....your posts don't suggest this is likely) or you need to decorate and sell on, moving to the done up place that suits you.

Moving will be a big fag and annoying and costly, even with a stamp duty Hol (although at least you'll get decent savings and maybe find you can sell more easily...but you'll have to be quick) but living through a major renovation is probably even more annoying, especially if there's always a niggling feeling that the numbers don't stack up.

Some people start a renovation and go over budget and later realise they've spent beyond e ceiling of the street.....irritating, but perhaps unplanned and hopefully not too much of an overspend. Starting out on a project knowing you will do this and that there will be a signicant overspend, to be honest just sounds a bit daft.

Sometimes it's best to just say you've made a mistake and cut your loss and move on from it. Or, lower what you want from this house and do a very limited and controlled amount of work to keep it in the right price range, with a view to moving in perhaps 5 years to get all the stuff you really want.

Again all good points.

We've done a very thorough costing - got quotes and already stepped back from some ridiculous prices for kitchens and bathrooms.

We would like new bathrooms as the current ones are serviceable but are going to need things like a new shower soon, new taps, the loos fixed and we just don't like them. Putting in good quality but not top end bathrooms with better heating and a decent water supply will greatly improve our experience of living in the house and I think is just one of those things you need to do every now and then.

I'm putting a woodburner in because that will make the room it is going into much nicer, more likely to be used and cosy in the winter.

We'd like to be able to sit inside on one of the many many cold wet days we get where we live and be able to see the garden. That's a nice to have that will greatly improve our experience of living in the house.

Do we need swanky work tops, boiling water taps, expensive flooring and lighting...no, and that's where we'll cut the budget.

It is really helpful seeing the different view points.

Our intention is to live in it for a decent length of time. But best intentions and all that - we all now stuff can happen that changes things radically.

We aren't mortgaged to the hilt, much of the work will be done out of savings and income. There's slack in what we are doing that if we don't want to do it all at once we don't have to so we can stage it.

But there's a fair amount that we both want to get a decent amount of benefit out of what we are doing - so the house works for us to live in now.