Renovation and extension costs

[Bakesandtuna]

Hello, is anyone else stressed out about the cost of doing extensive work to their property? How are you assuring yourself you are doing the right thing?

We bought a property back in 2020 knowing it was a big project. Great location but in hindsight we paid more for it than it we should have. The market was crazy back then in terms of high prices.

We did not anticipate cost of renovation would skyrocket as much. I’m just worried that making the house good will eat up nearly all our savings.

It’s a 1930s house and we are doing a double storey side extension, back extension and loft. There is already a garage and back extension but neither are structurally sound to keep. The cost is going to be £390k.

With that money, we can only afford to build the shell and decorate, paint, tile, flooring, etc as time goes by.

I know we will enjoy the house once it’s done but I sometimes feel we made a mistake.

£390,000 is a crazy amount for renovations! You can build a while house for less than that.

How much have you spent so far? There is something called sunk cost fallacy. Sometimes it is better to walk away, even if you have already spent money so you don't end up losing more.

Well it depends on how that is relative to value and the ceiling prices on the road. I'd be inclined to sell and buy somewhere that wasn't a do-er upper in this climate.

Houses in the row are valued in excess of a million and other houses under a minute’s walk away are likewise over a million. Now roughly 1.2-1.5 million. These houses rarely come up for sale. The views are excellent. You’d think you’re in the countryside instead of London (East suburbs).

Bought for £745k. Needed to be near daughter’s school. If I sold, doubt we’d get the money we paid.

We plan to stay here for at least 10 years if not more.

You paid 750k, you’ll spend another 400k, so total 1150, and that’s what it will be worth at the end?
Doesn’t sound catastrophic.

Sounds OK to be honest as long as your aren't trying to flip it. If you've got the money for contingencies and a reasonable income and can fund the work - you might as well do it. You might have to live in it a long time!

Our work took us over the ceiling price for the street, priced just before the prices went mad pre - covid and they honoured the prices for the build.

But now other houses on the street have been done up and it's all looking more sensible. Also we are likely to be here for 10 to 15 years....so we'll get the benefit of living in a house that works for us.

If you are really worried you could phase it. But honestly probably better just to suck it up and get it done at once.

We priced everything up including flooring, curtains, decorating, making good the garden - and tried to keep to that so we weren't swayed by super expensive stuff like made taps and things. Bought good quality classic stuff that will still look good in years.

But to answer your question yes, prices are shocking at the moment, but I'm not sure building work will come down...though some material costs are. A friend is having to suck it up as bought pre - pandemic with grand renovation plans - and the cost of renovation has doubled.

We've spent about half that - reno rather than extension - and still have work to do. We're in a lower priced area and are above the ceiling price for the (tiny) street at the moment BUT we now have an excellent house that works well for our lifestyle and where hopefully we'll live for 15-20 years at least.

So I think it's been worth it in terms of convenience and hopefully the sums will work out long term. Our location is pretty much unbeatable for the price (we'd have had to have spent double buying the house to better it) so it feels like it's paying off in quality of life? But the work we've done has been expensive but affordable, if that makes sense? We haven't had to stretch ourselves.

Are you happy with the house? Can you see the potential?

It's a lot of money, but will you end up with your dream home?

We are just about to buy a project house but my partner is in the trades so it feels a little bit less stressful. I'm still stressed about how far our money will go.

Could have written a very similar post to you OP. Have you started the project yet? We are nearing the end of ours and found budgeting it very difficult. Costs are double what we expected when we set out and we are having to remortgage to complete it.

I don’t regret it (yet!) as we will have our dream home that I will stay in for at least 20 years and it will be perfect for us. But I don’t expect to get back in a valuation what we piled into the house straight away.

We’re just about to find out our how much our double storey side and back extension (no loft though!) is going to cost. We’d budget £250k about 18 months ago when we first decided to do it and thought that was generous. We’re just about to go to tender….I don’t think it will be nearly enough :o(

Is that £250k including VAT?

@Littlessweepy we are starting early next month. Hmmm we haven’t considered remortgaging but that might be a way of completing the decorations.

@helloimnew123 we are happy with the house but taken aback by how much this is now costing us. It far exceeds what we expected.

If you’re spending £390k for a house that will be worth £1.2 million, it sounds like a good bet.