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WHICH ROUTE WOULD YOU TAKE?? Knock down + rebuild, or extend and renovate

12 replies

knakered · 30/12/2007 18:03

We live in an unusual 1950s single storey detached modern style house on 1/3 acre, overlooking countryside in prime south bucks location, proabably worth £800K. We want to maximise our return on investment other much larger houses have been bought by developers, knocked down and rebuit and sold for £3million+. Could we do this ourselves ..ie hire a builder and make the profit...or should we extend and renovate..ie additional floor either add pitched roof with dormer bedrooms - or add another flat roofed storey all very modern, glass, sedum roof, 1st floor terraces etc. The knock down route - I would guess is expensive (Need £500K?? to build?)..so we would need to sell and take our profit elsewhere as we could not shoulder that cost. The renovate and extend options we think we could take the approx £200k cost and continue to live here. Not sure what this would add to the value...but would proabably pay its way...what would you do?..take the money and run (knock down option) or extend (we love living where we are

OP posts:
noddyholder · 30/12/2007 19:20

It would be really worth taking advice from an architect re costs as you may as well have the profit as some developer and that way you would also end up with your perfect home.Sounds great btw I renovate [properties but not on that scale but if I was you I would work on drawings with an architect and tehn hire good recommended tradesmen and if you feel up to it project mange and finish the interior spec yourself

1066andallthat · 30/12/2007 20:28

Ah, done all the above. All totally horrid, if you are on site and pretty awful for your relationship, unless the end goal is totally worth it.

Having done the buyer-beware-thing, are you totally sure, you couldn't raise enough to re-build? Have you looked at the self-build mortgages? If you are interested, I could go dig around and see who we used. I remember they were absolutely lovely; the only real draw-back was you needed to have the money up-front, for whatever stage you were doing, e.g. the footings, and they then refunded it. Oh, by the way, we didn't use an architect but a very good surveyor - much cheaper, as long as you know what you're doing, which ex- did.

knakered · 30/12/2007 21:15

I suppose that I just need to get an accurate idea of rebuild costs vs extend and rennovate...think that I dont want to get this wrong -- see this a as the big investment opportunity in my life - so want to get it right...would hate to break even on this when could have taken a life changing profit...wonder if we could employ some sort of property consultant who could do an analysis...dont feel comfortable working on my guesstimates

OP posts:
1066andallthat · 30/12/2007 21:40

Add a third to whatever you do estimate - sounds harsh, but was definitely true in all our experiences.

Have you looked at some of the Channel Four series - sorry, can't remember its name? I've just googled "self build dream houses" and although, it didn't come up, a load of stuff you might be interested in did, including a calculator.

The only piece of advice I've got is don't forget there is a huge difference between building your dream home and doing something as an investment.

WideWebWitch · 30/12/2007 21:48

I think you should think about what you want from the house. I think the market is about to crash and so if you like the house you should stay and so whatever would make you happy to stay. I am feeling slightly impatient it has to be said with this idea that houses are investments only and not places to live. So in short, I think the time has passed to make a quick buck, I think you will lose money unless you sell and rent.

lalalonglegs · 31/12/2007 10:07

Bungalows that have been overextended always look crap imo so much better to knock down and rebuild (also you won't pay VAT on the work) but depends if you want to live in the house for a while and enjoy it and then sell it for £3m or whatever it is worth. Cd be worth a lot less in coming months/years and getting plans and consent plus lining up builders for knock-down or radical extension will take at least six months so market could be in doldrums completely by then.

Read mags such as Homebuilding & Renovating to get accurate idea of building costs and there are banks that will lend very favourably to those working on self-build projects (releasing small portions of money in stages rather than in one fell swoop so you are not paying out for full amount for duration of build).

But, tbh, property development isn't for the financially cautious and you do need nerves of steel even in a rising market to bring off a project successfully - dealing with builders, planners etc. In a falling market, you may decide it's simply not worth the fuss. If you aren't attached to the house and just want to turn a quick buck, I would sell to a prop developer and let him/her shoulder risk.

lalalonglegs · 01/01/2008 11:22

Thinking about this, £500k seems very small budget to build house that may be worth £3 million. In that sort of new-build home, buyers would expect a lot of swanky bells and whistles - kitchen alone would cost upwards of £50,000 and you would need several bathrooms costing £10-20,000 each plus all sorts of things that rich people take as standard that I don't even begin to understand: zoned music areas/state of art security system etc. I think unless you really know a lot about this level of the market then it is going to be a very steep (and costly) learning curve to get it right.

If I were you, I would apply for permission to extend a lot if you really want to stay there (but you would need exceptionally good design to make it work). OR I would apply for permission to knock down and rebuild huge replacement house and sell your home as a plot with consent which will maximise its value without very much effort in terms of risk or stress or cost.

GreenGlassGoblin · 01/01/2008 11:25

my mum is addicted to those self-build magazines (she dreams)- might be worth having a look at some of those for ideas / other people's budgets and results? Can't remember the titles at the mo, but WHSmith stocks them...

Swedes2Turnips1 · 01/01/2008 11:44

I would knock down and start again. Although property prices may fall from their current levels the property market is not going to completely collapse - there still isn't sufficient supply to meet demand. If property prices fall 20% it sounds as though you would still stand to make a good profit by knocking down and rebuilding. 1950s builds are not terribly desirable - small rooms, mean skirtings and architraves, uninspiring architecture - so you would be best to start again I think.

ska · 10/01/2008 11:40

we were told £1k per sq m for building/renovation (in south east).
there is a mag 'self build or renovate' or something similar which i have bought sometimes for good ideas about which is best to do - get it in smiths or waitrose i think.
i'd love to knock down and rebuild as we aer in similar position but have no budget for it yet. good luck!

titchy · 10/01/2008 12:01

ska - I read that as 1 pound / sq meter! I too have read similar estkmates - about £100 per square foot. Most of the value of a property is in the land rather than the house, so a £3m house itself would be worth about £1m just on rebuild costs, with the land it sits on worth £2m.

I think extending is probably only for the very faint hearted - you may increase the value a bit, but not that much bearing in mind style and possibility of over-extending. Knocking down and rebuilding wold be the best bet money-wise. If you wanted to tackle it yourself you could live in a mobile home on-site, re-mortgage to release the funds to do it (interest only if you intend to sell on). Or sell with pp to a developer. Bear in mind a developer would want at least 30% return on his investment, but would proably be able to build for less than you would.

Look at the sums - how big are the £3m houses in square feet? Assuming they're around 3,000 sq ft then building costs wold be around £300k. Add on the £50k kitchen and integrated entertainment system, pool, gym etc etc (and check out the spec of these houses - don't let yours fall short!), overall cost would be in region of £5-600k which feel about right (demolition and removal costs to add here too - demolition cheap but disposal not I suspect!). So a developer may be prepared to pay £1 to 1.5m if you have planning permission (maybe outline pp so developer can choose the style themselves).

HTH and good luck am very jealous!

titchy · 10/01/2008 12:03

And check out how much land comes with the existing £3m homes - if they're an acre and yours is only 1 third of an acre you could end up with a very high spec house no-one wqants cos they can get the same with more land elsewhere.

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