Extend the house or move?

[EhamRoeDeer]

Hi, I know this dilemma seems to come up quite frequently, but I’m too far in to see things objectively, so I’m looking for a bit of outside perspective. Should we extend and pay off mortgage early or buy a bigger house?

We live in a four bed semi-detached with a good sized garden. We live in the nicest area of our town and are generally happy here. We have three children and don’t have much downstairs space ( the fourth bedroom is a loft conversion), so are thinking about a single storey rear extension for an extra living room and a small side extension for a utility. This would cost roughly 85/90k. We probably wouldn’t make that money back for at least ten/fifteen years but we would still have enough money to clear our mortgage in that time and enjoy some holidays whilst our children were still relatively young.

The idea of moving has come from my husband who wants a detached house. I see the benefits of this as we had some difficult neighbours who thankfully moved on. I also think a bigger house would be more of an investment. However, we would have to double our mortgage to buy a detached house and in the area we are looking at ( our town plus surrounding villages), we would get a similar sized house with a much smaller garden. Plus, nothing seems to be coming on the market.

Other factors influencing us are:
We have both had pay rises which have taken us into a higher rate pay bracket, which is amazing but it’s come after many years of having to be careful with money - not taking holidays etc. The additional mortgage repayments on the bigger house would take up a third of our take home pay, so nothing outrageous but we wouldn’t have as much spare to overpay or to spend on other things. I feel like our children should be enjoying some of our extra income.

We are also both 46 and hoping to retire at 60. A detached house might set us back on that plan.

I’m worried about spending 85k on two quite small rooms ( utility 2x4m and living room 4x 3.5m).

I grew up with no money and this heavily influences my decisions. The thought of another 200k on the mortgage seems wild to me.

Basically, there are pros and cons on each side. I’m feeling very uninspired by both options to be honest. Any thoughts welcome.

How old are the children ?

If you lose one within the next few years then I'd stay put and not extend either

13, 10, 7.
So we’re within ten/ 12 years of them leaving (in theory!)

Maybe keep an eye on the market for afew months to see if anything better comes up for you to move to, if not then extend

Thank you both.
Yes, I had thought a watch and wait approach might be the way to go. Regardless of everything, it would seem to be a bad time to move unless you really had to!

Your DC are approaching the age where they will spend most of their time in their bedrooms! We extended when ours were 11 and 14 and they barely come downstairs now!
It's not wasted our extension... But not as needed as we thought!

Honestly, I would stay put. It doesn’t sound as though you need the detached space, more that it’s a ‘nice to have’. You have enough bedrooms and that’s where the kids will be in their teen years. I would value the financial security and having that extra income over the extra space. But then I am super cautious financially. It sounds as though you are too!

I would move, you have had bad neighbours once, it could happen again and imagine if that happened after you had spent all that money on extending and you would still want to move after spending nearly 100k on where you are now.

Honestly I would not move. I would pay off that mortgage as a matter of priority. Don't think you need to do the extension either really. Agree that when teenager hood hits, the shared family space is no longer needed to the same extent. Enjoy the relative lack of pressure on your finances. While your neighbours are good, they may stay for years and years and you may never have bad neighbours again. You may move to a detached house with nightmare neighbours.

Good to have a range of perspectives. Thank you all!
I hadn’t considered how much time the kids might want to spend in their rooms 😆. That’s definitely worth thinking about.

I would probably stay put and not extend either, but it would depend on how strong I thought my pension position was.

We moved when I was 43 and I massively extended my mortgage to do that to the detriment of my pension. That was only worth it because it cut my daily travel time by so much. We gained space but didn't really need it, though that was not the object of the move. Although I expect to pay the mortgage off at 54 that has only been possible due to low interest rates and higher pay than I anticipated and lower travel costs. I have more saving to do to afford to retire before state pension age.

Retirement gets to be more of a priority the older you get especially if you are in an insecure job, so at my current age (53) and with the benefit of hindsight I would put pension ahead of more space.

Also as your youngest is 7, so would only possibly just have left home at the age you are planning to retire, do you have the savings to help them get started?

If you will have pension and kids sufficiently sorted, I think I would probably stay put because you are in a good location and it would be so much more expensive to move. It is part head and part heart decision though.

I'd love a utility room so I'd build that on, but not the extra living room.

@EhamRoeDeer My DDs never spent time in their rooms! This is something that happens when you don’t have enough living space. They are forced into bedrooms. We have a bigger house and avoided this issue. We preferred to have DDs around.

In this day and age, retiring at 60 is a luxury. Are you both teachers? Hardly anyone does note and you are prioritizing this over space. Your choice but if you have three dc and no utility room, I’m guessing you don’t have a very big house. Personally I would move and dc won’t need a big garden. Then sell when dc get jobs or in 15-20’years.

Get on Rightmove and see whether what you would buy is out there. Sometimes when you look around you realise that the ideal isn’t out there and it might be better the devil you know. I wanted to move for years, but honestly could never find anything that was a big enough improvement on my house to spend the extra. I did eventually move and am very happy but a small inheritance enabled it. I never really saw anything that was enough to justify the extra mortgage. Consider different designs to improve the house you have and properly look at the move options, before you make a decision.

Stay and extend as you like the area. You could move and end up with bad neighbours! You can’t predict the future. Any savings can go into pension pot and help kids with house deposits.