Not making money on extension

[Jujujuly]

Planning a side return and loft conversion on our London Victorian terrace. It’s worth c.800k now. Works will cost minimum £200k. Ceiling price for our area is £1m absolute max but more likely £900-950k, so we wouldn’t make any money on the renovations if we were to sell.

Not planning to sell any time soon but you never know. Is this a big mistake?

900k 2 years ago has gone up in value!

not necessarily

I think you’ll make the money back if you’re there for 5 years or more. More than that although the side return is a big job, it makes a massive difference to how you use the house. You might want to wait a few months if you can though as I think loads of builders are having difficulties getting materials etc at the moment and it won’t be fun during the winter.

Yes we wouldn’t do it until late next year earliest. I’m in the early stages of talking to architects/working out budgets etc. Haven’t yet sunk any cash into it hence my question - if it’s a terrible idea we might not go ahead.

Prices in my area have been steady for the past few years. Zoopla thinks the extended house that sold for £895k in 2019 is worth £895-950k now. We have about 50% equity so hopefully wouldn’t lose anything, and I guess if there’s a massive crash at least we’d be stuck in a bigger house.

We are doing something similar. £200k of work on a house we paid £1.3m for, which I don’t think we’d get more than £1.4m if we decided to sell after the work was done, but I’m hoping not to move for at least a decade, so hopefully it will even out.