Taking house over ceiling price ...any supportive stories

[BarkingUpTheWrongRoseBush]

Bought house a year ago on popular street, desirable area. We slightly overpaid at 485k...but market gone a bit bonkers so now would probably be 525k.

It’s a large 5 bed semi, with off road parking, and a garden. original 1908 features. It needed a big refresh. New water tank, new bathrooms, redecorating throughout. Tiny kitchen so we are extending to give downstairs loo, big kitchen, utility.

We’ve costed it all, including decorating, firings, new front gate, paving, etc etc at c £200k.

We aren’t planning to sell for 10 years or so. Dh just says houses needs updating and it’ll all even out.

What else is on the street? I.e. are there any detacheds? We bought a semi and extended it, we were worried about ceiling price but needn't have been. We sold it a few years later for a decent profit.

My only point is that 200K seems a lot if it's one extension and basically just redecorating beyond that. Does that include rewiring and replumbing throughout?

On the other end of this...the house we are just buying was bought by our buyers around 6 years ago for £120k, which was the ceiling price on the street. They have spent a fortune on it (certainly in the 10s) and I know they were planning on remaining there but their circumstances changed. We have just bought it for £190k, so I am sure they at least broke even.

I would think how long you plan to stay. If it's just a step on the ladder then I'd be more careful, but if you want to stay then make it a nice house for you based on what you can afford.

We have completely smashed the ceiling price for your street. But we can afford it and are planning to stay a long while.

200k is everything, new kitchen and appliances, 2 sets sliding doors, 3 new windows, new velux, big extension, new doors in some rooms, decorating throughout, 2 bathrooms. new woodburner installed, landscaping, new furniture., flooring, replacement radiators...and and and. Apart from a new roof it hadn’t been touched really since 1980. Electrics are fine.

The street is a mix of terraced, detached and semi detached. The biggest house went for 1.8 million the 4 bed terraces no parking or gardens went for 485k recently.

When we were thinking of selling a house 25 years ago I was repeatedly told there's a 100k ceiling for that type of house in that area. My argument was one day with time and inflation it will likely be a million.

Currently 300k and climbing.

That said 200k seems huge for what you are doing unless the extension is massive.

I'd likely wait a few years to see if the building frenzy abated, maybe spend some money doing a bathroom and the garden just now.

Ok from your list I wouldn't borrow money to furnish, decorate, change doors or wood burner they would come over time from savings.

I'd only borrow on the structure of the building and kitchen/bathrooms but then being mortgage free was a priority for us.

If you can stay 10 years then you get the enjoyment of living there too as well as a chance of getting your money back.
We did similar in our last house - spent more than ceiling but planned to stay there forever. We finally sold last year after only 5 years of completing all the works. We got our money back and then some in the crazy market of last year but we were prepared to lose a little too as we really enjoyed living there - so much more once everything was done our way.

I think it depends if you’re planning on staying there a long time or if you’ll want to move in a few years and want to recoup that money straight away.

It seems a lot to spend in relation to the total cost of the house, so you’d be spending around 40% of what you paid (my maths is a bit off but you get my point!)

If it needs that much work could you not consider moving to somewhere with that money that’s all done?

We aren’t borrowing money to do it,, comfortably using savings and income for the work. We’d rather do it all at once and have it as we want to live in it. That’s kind of dhs point, we’d spend it living in the house over 10 years or more making it right for us so just do it all at once.

The mortgage will be paid off in 10 years too.

I had a colleague who did similar.
Bought for 435. Sold for 600 ( after 3 painful years of talking about her feckin forever house as a way of justifying. They spent 120 on a kitchen extension. 20 k on an ensuite etc etc. If they had just painted it, it would have gone up to 550.
I think spend what you want but dont think of it as investing in property. It's not the same thing.

What rooms will you be adding if it is already 5 bed and what is the increase in floor area? My main concern would be the market for a house that size as I would have thought more people would want a detached. Also will you be loosing much garden space to the extension?

If houses are selling for £1.8m the ceiling price for the road is not really an issue but you want to make sure it is not too big for its plot and the additional space is useful. I am not sure there is much of a market for 6 bed semis.

If you can comfortably afford to do the work I’d go for it. I think if you’re planning on living there for ten years and you can afford the work why would you not? It will go up in value in ten years and regardless in your situation it really is a home not a temporary investment you’re planning on selling in a year or two. That said, we’re doing ours up in stages, to ease the financial pressure, if we did it all at once would have had to borrow/extend mortgage.

At the moment it’s a 5 bed with en-suite and family bathroom and no downstairs loo and a tank that isn’t big enough to fill the bath. And a kitchen that’s big enough for two people who really like each other to cook in. No utility and a washing machine in a shed in the garden.

Big reception and big dining room/family room.

It’ll be a 5 bed with a downstairs loo, big kitchen diner with access to garden. We aren’t losing any useable garden space. The garden isn’t huge but about normal for where we are.

I think that’s helpful to think of it as living in it rather than thinking about ceiling price.

We aren’t doing it on the cheap, (!) but equally we aren’t gold plating.

A lot of the houses around here do need refreshing, we looked at a lot, they are big solid houses but most have had very little done for 20 or 30 years beyond maintenance .

Given the housing mix on the street it sounds like ceiling price isn't really a concern for the street, more the type of house. But 10 years is a lot of time. If this is the best combination of house + renovations for you, I'd go for it. I assume detached is out of your reach?

We nearly offered on a detached, with a better garden that had already been 'done'. It would have only been slightly more than ours is going cost once we've finished everything. Beautiful huge downstairs.

But...and it's a big but - it was 3 small bedrooms and a box room - that could only fit a child's bed - it was more of a walk in wardrobe really.

And no scope to make it any bigger upstairs. We weren't the only ones to take a builder round to see it if could be done.

So we fell for the 5 bedroom semi - with scope to extend downstairs.

In the area we want to be in - detached are either modern with small gardens, or old and very very big with small gardens.

We were warned about paying over the street ceiling price 8yrs ago (by our selling agents try to sell us one of their houses) . It was £450k but one of only a few detached out of around 200houses and the most expensive sale previously was £430k for a semi. We bought it and whilst initially being nervous of investing more than we could get on return, invested around £150k in getting it right for us and accepting it's our home not an investment. Semis are now selling for up to £700k so at a guess we would now be worth at least £750k so although we're probably not going to get an increase in value proportional to what we invested we're not going anyway so not too bothered as the house is perfect for us.

The idea of it's our home not an investment is a good one to keep in mind. Thank you. It's got to be right for us.

Ours is a good solid house, in a good area - and as long as we don't take the piss when we eventually sell - it'll go quickly.

We took our old end terrace above the ceiling price for the area, but through vagaries of planning plus area perceptions it was a big house on a big plot in an area that was mostly current/ex council.

Had a big garden despite an extension.

We bought it cheap as a decorative disaster with an unwillingly selling occupant (divorce sale) without building regs completion on the extension. It was a 5 bed (ignoring lack of building regs cert on loft conversion) and we stole a box room to make a family bathroom upstairs and generally sorted decor and layout issues taking it up to the 200k area ceiling.

Anywhere else in town it would have been worth way more because big plot, good size but area was very unfashionable. We just about broke even but we weren't planning to sell so spent more on carpets and bathroom fittings (plus a new boiler and updating radiators to suit room sizes) than if we'd been planning a for profit flip.

I think what you're doing sounds sensible - 5 bed houses definitely need a decent kitchen space!

I'd definitely spend to get things how you want them and then enjoy it. I really wish we'd had the money to skim all the walls rather than just the ones that desperately needed it. It didn't affect the value but the lumpy walls annoyed me to look at!

At our last house which we knew we wouldn't be staying in we gutted it and tested our DIY skills but we bought in a rising market and sold a couple of years after the crash so basically did not make much money on it but saw it as a valuable lesson in skills for us.

This house is one we intend to be in until the children leave home. We have already been here over 10 years and Ds2 is 15.

Our street is a mix of houses with ours being on the largest plot and it did have a double garage and our drive fits 4 cars. The other 4 bed detached are one car behind the other unless they remove the front garden.

We have done a lot to it but for us it wasn't about seeing a return on our money it was making it into a home that would grow with us. We also had a teeny kitchen with no worktop space. We did a kitchen extension, landscaped the back garden following it being wrecked by the building works, new boiler, new radiators, new windows, sofits/facias, converted the double garage into a massive playroom with a store at the back for all tools/garden stuff, new bathroom, en-suite and downstairs loo.

It is almost finished. We have taken our time with it as there was no rush. Just a few decorating things this summer. I assume we will see our money back but it genuinely isn't about that at all. There are no purchases or decisions we have made that we regret in any way.

I paid 390 for my house and put about 200 in to it. My concern at the time was making it a great house for us.
Now I'm selling and I'm not quite breaking even. In fact, if I hadn't done a thing it would have sold for about 475 without me going much beyond a lick of paint, so in real terms I've lost money.
But for 8 years it has been a fab house and I don't regret spending the money. It's your home, not just an investment.

We are about to do something similar. Our house is worth maybe £50,000 more than we paid for it and we are going to spend ~£180,000 without adding anything of real value like a bedroom. I am a little uncomfortable about it - my partner isn't - but we do plan to be there for many years to come.

So many people think of a home as an investment, but the truth is when or if you come to purchase your next home that will have gone up in value also. Obviously works the other way round too.
I agree you should do all the work in one hit and enjoy the benefits. However for the kind of prices you are quoting I personally would want a detached every time.

I think this sentence sums it up nicely : "Spend what you want, but don't think of it as investing in property. It's totally not the same thing." Good luck !!

Generally expanding a smalelr house on a road with large houses going for 1.8 will not lose you money particularly over 10 years.

Have you worked out the price per sqm once extended?

If you're unsure about your plans ask a couple of friendly estate agents to give a guesstimate for the finished product.