Would u spend more on extension that house is worth?

[Hyperion100]

Just that really. Its probably a 5 to 10 year house.

We were planning on doing a small 3m rear extension but after 5 quotes came back ranging from 90k to 120k ex vat, ex kitchen. We dont feel like we can justify the cost.

The current layout is "fine" but when we bought a few years ago we always planned to extend and lose the tiny galley kitchen but we cant believe the costs are so high. A neighbour did the exact same build 5 years ago for 80k inc vat and inc kitchen.

Weve spoken to 2 local estate agents who said the work would only add around 50k to the sale value in todays market.

Will costs drop over the next few years? Surely they cant stay this high as no one will be able to afford any building work?

*than house it worth

FFS...*than house is worth

I’d personally only do an extension if it added proper value, for example another bedroom and / or another bathroom. Can you reconfigure the existing space instead?

Absolutely not in the current market. You will lose a huge sum. Much better to use that money to move to a bigger house.

Can you knock down the wall to lose the old fashioned galley layout instead? That will also add value and cost much much less. A wall down and bespoke kitchen might only be £40k but still add £40k too

A neighbour did the exact same build 5 years ago for 80k inc vat and inc kitchen.
Five years ago the labour shortage amongst the trades wasn't as acute, and there wasn't 10% inflation (worse for building materials). Materials prices have shot up, and there's more work than the building sector can cope with.

The problem with buying a property with the intention if extending is that if you don't do it straightaway there's a very big risk of ending up where you are now. With a home that's intentionally too small/not right and changed circumstances that make it more expensive and less valuable.

Definitely not. It's simply not going to be worth it unless you're planning on staying in the property for a very long time.

no you’d be mad
plus bear in mind building work always comes in over budget

you will end up with the most expensive house on the road - big mistake as all roads have a ceiling price - people who have money to buy a house that yours would then be possibly worth would be moving to a nicer street. Don’t do it!

This depends. We did this. Spent 130k on extension, kitchen, layout of the house, and initially it only added 50k to the house. However, a year later it added 150k because more houses went to market and you could really see the difference. 3 years later our house value was 230k above - we sold within days at that price despite other similarly sized houses costing 100k less. But we live in an outstanding school area, the other houses were not renovated at all and not designed for ‘modern’ living like ours was.

No if you are only planning on staying for 5 years, potentially yes if 10 years and it would make a big difference to how you live / experience your home. Over 10 years you would expect the price to catch up with your spend on a worthwhile renovation.

I don’t see it getting much cheaper anytime soon - maybe by a smidge if the market really collapses, but price of materials doesn’t seem likely to fall as driven by global demand.

in our part of London pre-Covid you didn’t see a major price differential in renovated vs unrenovated properties, but I would expect that to change as building costs stay high and people are skittish about taking on a project. Would be interested if there is any data, but anecdotally hear from people that it is harder to shift a doer-upper/ buyers not considering anything that would require work.

Bit of a different standpoint to others.
We have just had an extension done, I was shocked at the cost, quotes were double what we expected and I don't think we would see that reflected in the valuation of the house - however when we weighed up the cost of moving, stamp duty etc, we decided to go ahead, as we love the location and our neighbours.
I don't regret out decision, we are likely to be here for another 5-10 years while we ride out paying for childcare and wanted to make our house a home for the time we are here.

Two different questions there. It think it is likely that costs will remain this high, or as good as, because the shortage of skilled labour isn't going to be fixed any time soon. Meanwhile the drive towards green technologies is going to divert more and more tradespeople from the general domestic market- good luck finding a sparky at 2018 rates ever again.

But it absolutely doesn't make sense to tack on a £120k extension worth £50k when you might only stay for 5 years.

I think that the time you intend to stay matters hugely here. The longer you stay, the less it will matter cost wise and the more it will benefit you life wise.

Thanks all. Some interesting things to think about here.

Its such a huge amount of money (we hilariously thought we could do a small 18sqm extension for 100k) we want to make sure we get it right and if we are to make a loss we need to be sure that the way we live in the house is that much improved.

I did!

Costs really snowballed and we spent way more than we intended.

And there is SO MUCH snagging in the extension. Doors that don’t shut right, draughty windows, a damp patch on the wall etc etc.

I really wish we had just moved instead of getting involved in building work.

In my current house, maybe yes. It's in a perfect location for us, and we plan to stay in the area.

If this wasn't a long term home though, absolutely no.

Only you can answer this. How much do you love your house and its location? Are you are purely making the changes with an eye to increasing the value or is this a house you really want to live in and the extension will make it even better?

I would only do it if its your forever house, not 5-10 years. We spent loads on our extension and are probably at break even point between what we have spent and what it is now worth, but we only went ahead with it as we are never moving again!

We're in a similar position and that's with me doing 95% of the work myself, we just can't justify the expense right now. Labour and materials have gone up a ridiculous amount and as someone commented earlier, it's very easy to stray over budget. Would you not be better off using that extra £80k on buying another house now? It would be a much better investment in the long run.

missing the point of the thread, but we are in the process of (trying to) get quotes, also for a 3m extension to the kitchen. The sums you have been quoted are eye-watering. We hadn't anticipated anything like that.

Can I ask - what part of the country are you in (in case that makes a difference), and how big is the extension? 3m x ?m

Even if ours comes in at a cost similar to yours, I think we'd go ahead, although it won't cost more than the house is worth. We'll be here, health permitting, for 15-20 years, and to us, the enjoyment we will get from having the work done, will be value for money.

I wouldn't for a 5-10 year home. I would for a 20-30 year home.

@HurdyGurdy19 we had quotes to do a 3x3.5m extenstion pre covid it came out at £40k plus new kitchen costs
end of last year costs were requoted at £85-95k inc vat for single storey extension without the cost of a kitchen included (we are midlands)

we rethought it and changed the layout internally instead and had a new kitchen without an extension

@Hyperion100

financially:

probably not if I wanted to move in 5 years, but if I was happy to stay for 10 years I'd do it.

unless the street is a complete mess. I'd be wary if it was going to me in the position of. Being, by far, the most 'expensive' house on the street.

non financially:

im not sure I could deal with the lack of tradespeople & wait times for materials etc

i think I'd look to see how much can be gained by rejigging the layout.

difficult decision though.

We are doing a huge extension now, which technically we project will make a loss, or just break even on upon completion....However, we aren't doing it for the profit- and other houses that are in the same cost bracket in our area are actually far smaller, older, and nowhere near as 'done' as ours will be- not by a mile- you'd have to spend loads on a new kitchen, paint/carpet/plastering/new windows/doors- literally everything.

Additionally, this place has a massive garden and loads of parking compared to other places in my area.

Instead of mortgaging a big house, we bought cheap (ish) last year, and have grafted and saved to pay for the majority of the extension in cash- so in this way we have saved money as we aren't borrowing loads on a mortgage to buy a bigger (ish) house, or paying stamp duty and solicitors fees.

This way, we are getting exactly what we want- massive kitchen, utility room, ensuite, walk in wardrobe, 4 massive double bedrooms, a study and a gym....

So, yes, it will possibly look like a financial loss initially, but as PP said, in 5-10 years we will be way in profit, with a lush, totally 'done' house that meets all our needs, with loads of square footage and other features that the others just don't have in this area.