Move or improve? London crystal ball needed

[ParentsTrapped]

We have been planning to extend our kitchen and our loft for a while, but I’m
now wondering whether we should just try to buy a house that has this stuff done already.

We are in London and I think the cost of doing the work we planned might now be £350k (eek). We could probably buy a house in a slightly nicer area with the work already done if we borrowed an extra £400k. We’d also have to pay stamp duty on the new place (but would probably have to rent somewhere during the works which is an additional cost there).

Theres very little on the market in the area we’d be looking to buy which may push prices up, we might be waiting a while for the right thing, and whatever we bought probably wouldn’t be exactly to our taste. On the other hand we would save the disruption of living through the work (kids 5 and 3), it might actually be cheaper as we’d get a better LTV on the new place, and we wouldn’t be at the mercy of fluctuating labour and materials prices.

We have no idea what the plan is for secondary schools so it could be a forever home or not. Either way I would really like the extra kitchen space while the kids are young.

Any thoughts welcome! Also if anyone has done a side return extension requiring planning, an idea of timescale from instructing architect to completion would be great!

Are you factoring in the value you would be adding to your current home through doing the work, though?
Also, the work you do will give you a new kitchen exactly to your taste. Moving will give you at best a lightly used kitchen that may not be what you would have chosen.

And also the interest rate on your current mortgage vs what’s available now

Yes I think if we spent say £350k on our house it might just about go up that much in value, or maybe slightly less. We certainly wouldn’t be making a profit on the works but I guess that’s not the point as have a good amount of equity in the house already (50%).

Im leaning towards just deciding to move, but the fear is that nothing good comes up and/or prices go up out of reach and I’ve wasted the time I could have spent progressing the works. There probably is no right answer.

We’re very lucky to have 4.5 years left on a cheap fixed rate mortgage that we can port, so we’d have higher interest rates on some of the new mortgage but not all. Both kids will be in school once the fix expires and we will have significantly more disposable income by then as currently paying for a nanny which is £££!

You could possibly talk to an estate agent about the value just to be sure but it sounds like moving is better in terms of hassle then. A friend added 200k to the value with a 50k extension (not side return though, and before the recent inflation), so that kind of potential would change things.

Yes those days are gone! We wouldn’t really be looking to make a profit on the works, as long as we didn’t lose money on them that would be a win I think.

Have you got some other quotes? I live in a mid-terrace but it's a fairly good size and I did a total renovation (new plumbing, electrics, plaster, windows) and a side return and a two bedroom and a bathroom loft conversion (taking the house from a 3 bed to a 5 bed) and it cost me £120k for the basic and I spent £50k on a kitchen, carpets, flooring, etc etc. I spoke to an estate agent before I started to make sure I would make money so maybe it would be worth doing that? I also got a quote from the company I used www.hometales.co.uk if you want another x good luck!

@RPost when did you get this done? Costs have spiralled.

We have agonised about this for several years.

Have finally decided to stay put and crack on with an extension and renovation. We couldn’t find anything on the areas we were looking at that would justify stamp duty, expense of inevitable decorative changes we’d need to make and the cost and hassle of moving.

It took us nearly 5 years to make this decision, though!

We had a similar choice a couple of years ago. We chose to stay and extend…..but we got in just before prices went up.
Although house prices are crazy atm, if you’re selling and buying, it sort of cancels out. Whereas reno costs are simply ridiculous.
So if we were doing it now, I’d either get somewhere new, or wait until building costs get back to a reasonable level.

Secondary school is a factor. What are they like where your current house is?

I would stay put and do the work. There is every chance that the 'done' house that you buy could come with hidden problems that cost you extra to fix. Better the devil you know.

MOVE!

We chose to improve ours. 3 yrs later we are still having the builders back to fix things they did wrong. SO much snagging. We wish we’d just moved. Don’t underestimate the stress of a build and also the years of discovering things that don’t quite work.

Timescale probably 6-8month build. Architect process depends who you hire, ours took about 4 months to get planning permission but he was an idiot.

Conflicting responses 🤪! I’ve been going round and round myself.

@MarshaBradyo secondaries aren’t great where we are now, though we are in the catchment for good grammars (1 for each sex).

Kids are so young I have no idea whether they are grammar material. The area we would move to is in a neighbouring borough and doesn’t change the school options really - it’s just somewhere that is a little bit more affluent and so there are more houses for sale with the work already done, and they have slightly bigger footprint to start with. DC1 is in reception at an outstanding primary and very happy there so not really keen on moving away from that just yet, which limits the options a lot.

I think I’m leaning towards moving but there is nothing on th market! Everyone is playing a waiting game it seems.

Your chance to move will be determined by a lot of things outside your control, eg availability, chains, etc.
Whereas to renovate most things are under your control, at least you can try.

Yes, you’re right. Also with the renovations we’ve got the option of staging the works or potentially cutting back on stuff if finances require it whereas with the move we’d be committing ourselves to the full amount of increased costs, probably up to the max we can borrow.

Id love for the perfect house to come up at an affordable price so that we can buy it now but sadly that looks quite unlikely!

£350k for a side return + loft sounds crazy to me, even considering the inflated times we are currently in. I can't see how that can be worth doing/add value even approaching the cost.

It includes a new roof (needed) and remodelling on the first floor for a much bigger family bathroom.

At present the house is 3 doubles + tiny box room + tiny bathroom. Afterwards it would have 5 doubles + 2 good sized bathrooms, and a much bigger sociable kitchen. The side return is unusually large so would more than double the existing kitchen size. I’d hope to get it for less than £350k obviously but the loft alone is £75k for a basic spec, not including bathroom costs.

You could maybe do it in two stages. There are lots of loft companies which compete with each other to do that one job (keeping prices down potentially) and it’s something that can be done from the outside with you still living inside the house. Then do the side return once the DC are a couple of years older and you’re more able to cope with the disruption. And hope prices have fallen by then.