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Original poster

Move or extend? (London)

36 replies

Tetherless · 04/03/2022 14:41

Feel like I might be missing something here, advice welcome.

We don’t have enough space in our current home atm. When our fixed term is up LTV should be about 50%. The cost of an extension to get the space we need at current costs (which have rocketed) is probably about half our equity, so we’d need to remortgage to pay for that and our LTV would go down to 80% (of existing house value). I think the extension would increase the value but we wouldn’t make any money on it and we might just about break even, plus factoring in all the disruption and sunk costs on things like renting somewhere for part of the time. We wouldn’t be able to remortgage to factor in the increase in house value probably for a couple of years.

Alternatively, if we sell, we release that 50% equity which means we have a sizeable deposit. My salary has increased so we could borrow a lot and could afford a house with a much bigger footprint. Monthly payments would increase but not significantly more. Sunk costs would obviously be stamp duty and moving costs.

I can’t decide what makes more sense. I can give the amounts involved if helpful. Kids are 4 and 2 so high childcare costs atm which will reduce soon.

OP posts:
RebeccaManderley · 04/03/2022 14:47

Living with the disruption of major works in the house and small children could be pretty difficult. On the other hand, stamp duty on London prices is a lot of money. I don't think there's an easy answer.

Original poster
Tetherless · 04/03/2022 14:49

Yeah I’ve basically assumed we would just have to move out for the duration, so factoring in rental costs too. We’d be doing side return and loft so house basically gutted.

OP posts:
Londongent · 04/03/2022 16:30

Side return and loft conversion doesn't sound like gutting the house. Would there be any other works?

Original poster
Tetherless · 04/03/2022 16:38

We also want to knock 2 rooms together on the first floor to make a bigger bathroom. It’s a 4 bed but the 4th bedroom and bathroom are both tiny so idea is to create a nice big family bathroom on first floor and then either 2 rooms + shower room in loft or master suite.

It’s a typical Victorian end of terrace at the moment. If we move we could probably stretch to a double fronted one in the same area, but it would need work (albeit not structural).

OP posts:
BluebellsGreenbells · 04/03/2022 16:49

What actual figures have you got?

Building works coat have increase significantly - it might be cheaper to buy space than add space.

ASDdiagnosis · 04/03/2022 17:00

Actual costs would be the key thing. How much you get for your money in each scenario. It may be that the extension leaves you with a top-heavy house that doesn't have enough living space as the children get older.

sst1234 · 04/03/2022 17:08

OP, it’s impossible to give any decent advice without knowing the value of your house, how much of your household income is spent on mortgage repayment, and duration of your mortgage. It’s a really a piece of string question.

itsnotdeep · 04/03/2022 17:13

How old are you? how much longer potentially working/paying a mortgage?

Is the area lovely?

I think it's generally more economical to extend than move.

Alexalee · 04/03/2022 17:30

That sort of job sounds like a 250k plus job in today's market. Add in renting a similar size house for a year and finishing costs you will be over 300k. But I doubt moving will save you any money or get you a perfect house. Also will probably take a year to find a decent contractor, some are booked up for over 2 years in the future around us

Original poster
Tetherless · 04/03/2022 17:43

Ok so more details/rough figures.
House is worth c820k atm. Equity 400k. I’ve assumed total costs of 250 for the work, which we’d want to start back end of next year so hopefully enough time to line up a builder.

Ceiling price after the work is probably c1m. If we moved could push to 1.2m. Mortgage would be c35% of joint income either way (would prob stretch the term if we moved, because can easily overpay once our £2k+/month childcare costs go down), but because income is high it’s still affordable. We are early/mid 30s.

OP posts:
Original poster
Tetherless · 04/03/2022 17:47

@ASDdiagnosis

Actual costs would be the key thing. How much you get for your money in each scenario. It may be that the extension leaves you with a top-heavy house that doesn't have enough living space as the children get older.
If we do the side return then the house shouldn’t be top heavy. I think if we just did the loft then it would be.
OP posts:
minipie · 04/03/2022 17:50

How much is the next step up house?
Round here 90% of houses are virtually the same Victorian terrace and the few which are noticeably larger cost disproportionately more as they are scarce.

minipie · 04/03/2022 17:51

Top heavy houses are totally the norm here so I wouldn’t worry about that. The extra upstairs space is more useful than it used to be what with wfh, home gym etc.

House2022 · 04/03/2022 17:53

It sounds like you have a great income! If the jobs are stable i think you should move and do work in the future on a hopefully detached house with a bigger footprint.
I think end of terrace limits the potential of what you can achieve both in terms of scope of building work and ceiling price.

Original poster
Tetherless · 04/03/2022 17:55

For c1.2m we could get a double fronted Victorian house (there are a load in a nearby conservation area), which would give us the extra space we need, but they tend to be in awful condition so would need work, albeit not structural (as footprint is there but also prohibited as conservation area).

OP posts:
Original poster
Tetherless · 04/03/2022 17:56

To clarify, these bigger houses are still terraces! Actually being end of terrace atm means we have side access which will be handy for the work, and we have a really big side return.

OP posts:
tyoy · 04/03/2022 17:58

Difficult one, more "living space" is amazing imo, would you get that in the double fronted house in your area.

We are moving further out because where I am 1.2m gets you a terrace with tiny garden & after the pandemic I just want more space.

sst1234 · 04/03/2022 19:26

Having seen your update OP, doing the work makes sense. You’d get more for your money if you did the work as you would have the product you want. Looks like moving may not get you everything you want and stamp duty, moving costs would be high.

House2022 · 04/03/2022 19:30

I think OP maybe you can view a few houses a bit further out before you commit to staying in your area? Presumably the
housing stock can be more varied?

Once your children starts school it will be a lot more difficult to move. I think even if you eventually decided against moving out of your current area at least you have explored that option.

Original poster
Tetherless · 04/03/2022 19:37

My 4 year old is due to start school in September and we’ve already put in our choices. We’re very happy in our current area (lots of local friends, a v short (for London!) commute for me). Secondary schools are perhaps not as good as primary so I guess there might be possibility of a move later, but we’re not seriously planning that. In theory it could be our forever house whichever we choose.

OP posts:
tyoy · 04/03/2022 19:47

If there isn't a decent secondary option you will likely find the community quite transitory. So do what's best for you.

thefatpotato · 04/03/2022 19:56

@Tetherless

My 4 year old is due to start school in September and we’ve already put in our choices. We’re very happy in our current area (lots of local friends, a v short (for London!) commute for me). Secondary schools are perhaps not as good as primary so I guess there might be possibility of a move later, but we’re not seriously planning that. In theory it could be our forever house whichever we choose.
I was going to say, we are now trying to move but DD started reception in September and I feel like it's buggered us a bit. She loves her current school (it's great) so we want to stay local enough to keep her there. But the secondary options are fairly rough. If you're going to make a move out of area (even slightly) I'd do it before school!
tyoy · 04/03/2022 20:00

@thefatpotato if it helps 8 dc have left my dd's class over the last 2 years & moved them to other primary schools with no issue.

SD25 · 04/03/2022 23:17

Move to a bigger house. You've got salary and equity. If you're contemplating it then you're prepared to leave current house, so no brainer imho!

Binkybix · 04/03/2022 23:50

My 4 year old is due to start school in September and we’ve already put in our choices. We’re very happy in our current area (lots of local friends, a v short (for London!) commute for me). Secondary schools are perhaps not as good as primary so I guess there might be possibility of a move later, but we’re not seriously planning that. In theory it could be our forever house whichever we choose

We usually live in London (abroad at the moment) with amazing primary but not so good secondary. my advice is think very carefully about schools and area now - it sounds ridiculous but the secondary questions comes around sooner than you imagine