What would you do?

[giraffe6]

I live in a house worth 700k. There is a house near to me that it on an acre plot that I could (if I sold my house at the right price) get for 600k. I have a mortgage of 520k which I’d port. After everything (legal costs, stamp) I’d be left with 70k. The house needs work- it’s over 100 years old and is only 3 beds but it has tonnes of potential to extend and sits on a row of houses worth well over 1 million. The issue is that we would have to use the 70k to ‘make it good’- electrical rewiring, insulation, plumbing and decoration and then live in it as it is until we are in a position to begin extending (which will be a few years).
The reason I’m considering it is because I live in a new build which hasn’t gained much value over the 5 years I’ve lived in it and I’d like to build equity much faster.
Would you do this or stay put? For context, we live in a 5 bed house with two teenagers who are about to embark on their GCSE’s. The house we live in is in perfect condition.

If you’re thinking of buying a run‑down place for the future value and the potential to extend it can be a great long‑term move, but I’d just gently flag how much more everything costs than you expect.

I’m renovating a very run-down house at the moment and doing the full works: new two‑storey extension, loft conversion, complete rewire, new plumbing, fixing significant damp, plus all the internal changes. Even with careful planning, every stage has had surprises and every surprise has a price tag. Labour, materials, surveys, remedial work, it all adds up fast.

That said, once it’s done we’ll have a house that’s exactly what we want, with the space and layout that would have cost us a lot more had we bought something ready done. I have had estate agent valuations and even in this downward market it will be worth £300k more than our total spend. So it can be worth it, so long as it will not overstretch you. Just go in with eyes wide open and be realistic about how long it might take you to do it all.

Stay put. You don't have enough equity and before you know it, the kids will be off to uni/travelling etc. That's your opportunity to move.

The idea of building equity in houses needs to go out the window and that could be happening

Hi OP

it sounds a great opportunity.
a couple of things though, you are unlikely to manage those immediate upgrades for £70k if done properly for the age of property.
A100yr old property will almost certainly need maintenance on aspects you haven’t mentioned, and some you have might not be required.

is it listed?
is it in a conservation area?

No no no. You would move your kids from a nice new 5 bed to a money-pit 3 bed and have work done during their exam years (gcse/A levels).

There is so much risk involved here and you don’t have the money to follow through if things don’t go perfectly to plan.

Renos never go perfectly to plan, by the way.

Thank you so much everyone. It’s refreshing asking strangers because you give it to me straight! 😊

I think you might find that if you bought a new build in the last few years its probably not going to give back what you paid - 700k might be quite optimistic. Particularly if its a fleecehold with unadopted roads and an estate charge ?
Your probably better off trying to pay down as much as possible for a few years.

Stay put. The time to think about moving is after your children have finished their exams and are off to university.

Stay put. That amount of disruption just at this point in your teens' lives, when you don't have a big contingency, is a recipe for stress, money worry and regret.

No there are a lot of ‘ifs and buts’. Your children need stability with exams in the foreseeable. Stay put and get some more money behind you.