Extend or move? SE England

[BabybabybabyOooh]

Hi, I’m hoping some of the savvy MN crowd can offer some insight…

We’ve bought a 60s house that’s needed a full refurb. The quotes we’re getting to do a kitchen& utility extension of about 24m2 are pretty high due to the huge increase in building costs.

This means we’d be putting more into the extension than the value of the house as it stands.

Is anyone in the same position? Are you pressing ahead with extensions with the expectation that the house value will naturally make it worth it over time? Or does it make more sense to move house rather than build these days? Of course moving house is also costly so it’s hard to know what to do!

I’d love any insight from others who may be more knowledgeable about property/ building costs etc than I am. Feel like we’re making a huge financial decision without the knowledge we need!

What have you been quoted for the extension, and does it include the kitchen and utility cupboards/appliances/fitting as well?

Are you in London, or Kent/Essex? London will naturally be higher prices for building works.

@PragmaticIsh We don’t have architectural drawings done yet but initial estimates from three different contractors have ranged from 110-160k for the building only (I.e. excluding kitchen cabinets, appliances, plus flooring, fittings etc).

We certainly wouldn’t see our house valued at an extra 100k+ just for a larger kitchen & utility if we were to sell it anytime soon. So the sums feel very complicated! What would you do?

We’re in a relatively expensive part of east Kent.

We had an extension last year. Spent £150k. Property now valued £150k more than before extension if that helps. By two local estate agents. We are in London and used a premium building company

@Beachwaves127 that is quite reassuring, thank you. Amazing that you saw that return quite so quickly!

We spent a LOT on an extension. A lot.

House bought for 525k in 2020.
Extension finished this time last year (started June 2023).
House re-valued at the end of the extension and it value had gone up almost exactly the amount we paid for the extension.
So, not made any money but that’s not the point for us, by the time we come to sell who knows what the house prices will be doing. Certainly could ‘lose’ money! But the value for us is in having a house to enjoy every day, rather than the pokey dreary place it was before.
Plus we could have probably chosen cheaper builders but the peace of mind that came from our lovely (expensive) builder was invaluable given we were living on site with a 1year old, no hold ups at all, really reliable and worth every penny.

What are the sort of prices that the size of house yours would be with the extension are going for in your area?

We did a couple of extensions to a 1960s three bed semi in 2010-2015 (which we bought in early 2000s).
Our house is now worth a lot more than we paid for it (even after the cost of the extensions).
However, if you compare it to the current price of the same non-extended three bed semis we haven't made the cost of the extensions back. However it was still worth it to us as we are still in profit and had a bigger house.
If you are planning to sell and move in the fairly near future I doubt you will make the costs back. If you want to live there 10-15+ years it's probably worth doing

I think downstairs extensions adding reception rooms/ large open plan kitchens seem to add more value than bedroom extensions (e.g. over the garage). It seems to me looking at our local house prices the quality/ how modern the kitchen and bathroom are dictate the asking price rather than how many bedrooms.

It is now down to simple maths:

Equivalent sized houses in the area, are they worth at least the purchase price + fees + extension + refinishing is worth?
What could you buy if you bought at the full cost vs buy small and extend?
Are your priorities more about 'the place you want' rather than money?

Then make a decision...

It was basically £1 per £1 for the renovation. Although in reality if we were to move tomorrow we did pay stamp duty buying this place so would be quids out if we included those costs. Not sure what peoples stance is on including or not including stamp duty costs

Can't help too much on the extension costs / value add but you need to factor in the cost of SDLT if moving.

If you want to extend to make a house perfect for your needs and you intend to be there long term, then it’s probably worth it to have the house and lifestyle you want. Bearing in mind the cost of taking a loan, using savings or adding to a mortgage.

If it’s not a long term home, then it’s probably not worth a big extension. If the road is mainly three bedroom semis, then adding another bedroom and bathroom and extending at the back on the ground floor, probably will exceed the ceiling price of the area and might not be short term worthwhile.

@YesItsMeYesItsMe that’s quite encouraging. I think house prices aren’t likely to grow very quickly while the economy is so flat but from you and other posters it does seem like it should be worth doing.

And as @timeforachange999 points out, we’ll probably need to commit to staying in this house for a while. This is fine as we won’t want to move kids out of their schools etc anyway. And interesting point about what drives more value - I’d thought that number of rooms seemed to be the big driver, but I'm
sure (hope!!) you’re right that a modern kitchen & utility count a lot too.

@outdooryone this is the bit I’m battling with. From houses I’ve looked at in our area the cost of the extension is way more than the added value we’d get for our house. But miiiight be similar if we add in our cost to move (which would be about 50k), if the wind was blowing in the right direction. But it’s certainly not a definite yes!

£50k seems a lot to move - I assume a relatively high cost house so SDLT is high?

@outdooryone Ive rounded up a bit, might be more like 45k. Includes stamp duty, estate agent commission, removals company, new house survey etc.
Our current house value is about 820k. It’s a fairly ordinary house, but it is an expensive area

We live in Kent and moved to a bigger home. The first thing to check is what’s the ceiling price for your street?

We lived in a 3 bed semi where the cost of extended would have taken us beyond what our street could ask. Our neighbours did a huge extension 3 years ago and are now stuck as they wouldn’t get the money back in todays market.

We spent £50k more on our new house than the extension would have cost in our old place (so upped mortgage by £150k where an extension would have been £100k) but for that money we got a substantial detached 4 bed instead of a very normal 3 bed on a nice estate.

Check what other houses in your street/locality are selling for (actual sale prices not asking prices) - this will help determine if you’d get your money back. It’s all very well waiting 20yrs but you don’t know whats around the corner. I’d never knowingly put myself in negative equity in case I needed to move for any reasons (divorce, job loss, unforeseen mobility needs)

Both moving and extending are extremely expensive. Which to choose would depend on circumstances. An outbuilding might be a cheaper way of getting more space if practical, and the least disruptive.

I also live in Kent and I am in a similar position. Bought the house at the hight of the market in 2022 just before house prices dropped/stagnated. Initially wanted to extend and I have gone as far as getting architectural drawings/structural engineer calculations but the cost of extending is not worth it (considering the disruption of the work too given that it will be a kitchen extension). In our situation, moving is a lot better as it will also mean we will get a slightly bigger house for the money (one additional bedroom upstairs). You can speak with local estate agents, explain your plans and hypothetical scenarios of when you are likely to put your house in the market and they will tell you if that's worth it or not. That's what I did and they all agreed that we won't get our money back.

It’s an older topic, but I know many people are still curious about it. We’re now nearing the end of our house extension and full renovation journey.
We started with a 3-bedroom semi-detached house in London and decided to go all in: double side extension, loft conversion, rear extension, and full renovation. My honest conclusion? If you can find a house you love that’s already done-buy it. Extending and renovating is incredibly expensive these days.
We got a really good price from our builders for the shell work, and they’re well-known and trusted in the area. But once you add up all the costs, the total easily doubles. The challenge for us was finding a house with the layout and style we wanted. Also, moving within our area would have meant massive extra costs-stamp duty, legal fees, moving expenses, etc.
So, we chose the most messy, expensive, and disruptive option now, hoping it pays off long-term. Some parts-like the driveway, patio, garden, bathroom, and old bedrooms-will be tackled later, once we (hopefully) save up again. However, now- I can't imagine saving extra 50k.... I think it will take us decades...
Worth mentioning: we lived on-site with two toddlers throughout the process. That helped us avoid spending around £30k on rent in our area.
At the start, one builder quoted us £350k for everything, down to the smallest detail. It felt too high, so we said no. In the end, we’ll spend more than that 😩