If you’ve outgrown your current home, you may be wondering whether to invest in expanding and improving it or if it might be better to sell up and buy something bigger simply.
For most people, there will be two key considerations:
1. Which is the better move from a financial perspective? If I spend the money on this home, will its value increase by at least as much as the cost of the improvements? On the other hand, if I buy another property, will it cost more or less than any improvements?
2. Is it worth the upheaval and hassle? Can I continue living in the property while the work is being carried out – and do I want to? Or would it be better to pack up and move to a new home with the space I need?
Once you have an idea of how much space you want to add or what kind of upgrades and refurbishment you’d need to carry out to transform your home into something that’s going to suit you for the foreseeable future, the next step is to find out how much it could be worth once the work is done.
From the start, one thing to be aware of is the property ‘ceiling’ in your immediate area regarding size and price. So, for instance, if you have a three-bedroom detached home in a street with four- and five-bed properties that are worth significantly more than yours, building a double-storey extension and adding a couple of bedrooms and one or two reception rooms could be a worthwhile investment.
Before you decide to improve versus move, you need to work out, in detail, how much it will cost to make the improvements you would like. For example, will you need the council’s planning permission and building regulations sign-off? If so, you need to factor in that it could take months to get permission to carry out the work, and there will be the additional expense of plans and building regulations documentation. Unfortunately, getting costings isn’t always easy, as we continue to have tradespeople. And then, once you’ve agreed the job, you’ve got to make sure the contractor you employ turns up, carries out the work to the required standards and gives you the correct safety certificates for changes to gas, electric, windows, etc.
You must also consider whether the changes will add value to your property. For example, if all the other houses around you are of a very similar size, style and price, it may be the case that no matter how many rooms you add and how much you invest into high-quality fixtures and finishes, there’s a limit to how much someone will pay to live in your road or surrounding neighbourhood. Alternatively, there may be many larger properties available and fewer three beds, in which case, more bedrooms might not even translate into a higher value.
To help you decide whether to move or improve, local property market knowledge, in terms of average values and price ceilings for each residential area, is invaluable. In addition, an experienced local estate agent should be happy to discuss your plans and give you an idea of your property’s potential end value based on real examples of similar-sized properties they have sold recently.
They can help you understand how easy it would be to sell your current home and find a new one that meets your future needs – and whether it might cost you less to move than to change it. And bear in mind that if you sell and buy an already improved home, you won’t have the worry and hassle of improvement works – instead, you could move in and enjoy your new space, especially if it’s a new build property.
Steps to help you decide whether to move or improve your current home
1. Go around your home and write a list of all the changes you need. Is it just minor changes, such as adding electric sockets, decorating and creating a new bathroom, or do you need extra rooms, and will they require planning permission?
2. Work out the costs of making the changes you need and compare these to the costs of moving. There are lots of useful online calculators and helpful articles that will give you a guide. If you’re considering re-mortgaging to access the funds you need to improve or extend your property, it’s worth talking to a broker to understand what deal you could get.
3. look at the cost of properties that would meet your needs locally. Can you find something in an area you like that will give you the extra space you need? If new builds are available, they will have the added benefit of being energy efficient, so you might find that although you buy a bigger home, your running costs go down.
By Kevin Shaw, National Sales Managing Director at Leaders