Liquid error: wrong number of arguments (2 for 1) Is it better to move or extend your home in 2013? | Marsh & Parsons Sales and Lettings Estate Agents London

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Is it better to move or extend your home in 2013?

Tue 15 Jan 2013

It pays to weigh up the pros and cons of each option, particularly if you are planning on starting a family or a
home business For a lot of households, there comes a time when your home becomes a bit of a squeeze. Maybe
growing children are filling the house with their friends, toys and noise and making the rooms seem smaller than
they used to be. Or perhaps a burgeoning business means a home office would be a preferable to the kitchen
table, if only to keep butter off the paperwork.


So should you move somewhere bigger, or extend your house to make it large enough for you and your
activities?


In some situations the decision is, of course, made for you. If you live in a flat with no garden, there is little
chance of making it bigger. But if you have a house with outside space or a loft with enough headroom, extending
your property becomes real possibility.


Whether it makes more sense to move or to extend depends on a number of different factors the costs
involved, your future plans, how emotionally attached you are to your house, the area you live in and the type of
house you have.


Extending


Your location, and the level of demand for your type of home, could make a big difference to the financial
implications of extending versus moving. "In high-value areas like London it can be worthwhile digging under the
house to add a basement, but in other parts of the country it won't be worth it," says Helen Brunskill of Brunskill
Design Architects.


Keith Gorny, director at central London estate agents Marsh & Parsons, says of property in the capital: "The
reality is that if you are able to extend, it is often sensible to do so from a financial point of view." The cost of
buying a new house, he says, would far outweigh the cost of building.


However, the final result needs to be a balanced, rational home. A four-bedroom family house with no garden or
parking, or a house with large living space downstairs and tiny bedrooms upstairs, could be problematic if you
need to sell in the future. Even if you plan to live there for a long time, you will want to avoid spending a lot of
money on expensive building work that makes it harder to sell.


The cost of an extension depends on where you live, what kind of structure you decide to build, how complicated
unavoidable matters such as drainage are and, of course, how big it is going to be. Brunskill says you can expect
to pay between 1,000 and 1,600 per square metre just for the building works. Additionally, VAT is charged
at 20% on all construction work.


On top of this, you can expect to spend anywhere from around 10% of the construction cost on fees for
architects, structural engineers, building regulations checks and planning permission, should you need it. There
might be extra costs involved if you need to manage without a kitchen or stay elsewhere while the work is done.
The government's Planning Portal lays out the rules and explains what is permitted without planning permission,
along with details on how to apply if necessary. The fee for an extension to an existing dwelling usually costs
172.

The calculator on the Planning Portal website will help you work out potential costs.
Proposals were made at the end of 2012 to relax permitted development rights, so that, for example, larger
extensions could be built without the need for planning permission until 2015. The results of the consultation have
yet to emerge but there has been some resistance to the idea.


Moving


The costs involved in building an extension are undeniably substantial, and going through building work can be
wearing. As a result, Brendan Cox, managing director of estate agents Waterfords, based in Fleet, Surrey,
believes buying is a better option for many people.


"It's not always sensible to extend," says Cox. "When I value a house people often ask me about the two options,
and I can usually demonstrate to them why it is better to move.


"Take a modern three-bedroom detached house on a large estate in Fleet, worth around 300,000. If you
extended by around 300 square foot (about 28 square metres), that might cost you around 50,000 to 60,000.
And at the end I would say it would be worth around 350,000, so at best, it's cost-neutral. Unless you are sure
you are going to stay for a long time, it might not make sense."


Of course, there are plenty of significant costs involved in moving too. You need to pay estate agency fees for
the sale of your property, solicitors' fees and search fees, stamp duty on the property you are buying, removals
costs, survey fees, plus perhaps the cost of decorating. "The cost of moving from a 125,000 flat to a
250,000 house is likely to be around 8,000," says Cox.


Comparing the costs of moving and extending your house is not an easy task. To get an idea though, you could
ask for estimates on building work and add that to the current value of your home and see what sort of properties
you could buy for a similar budget. You could also chat to local estate agents to get an idea of what kind of
extension, if any, would appeal to buyers in your area.


Finding funds


Unless you have the cash to pay upfront how realistic either option is could come down to one thing: the
mortgage lenders.


You will need a substantial amount of equity in your property before you can consider borrowing more. David
Hollingworth of London & Country mortgage brokers says you will need at least 15% equity left in your property
after building works or the purchase of the new house to get a reasonable choice of deals.


"The bottom line is that borrowing is very difficult, full-stop," says Hollingworth. "In principal, lenders will apply the
same tests and rules whether you are borrowing to move or to extend. At a push, it might be easier to refinance
to extend your own property, as buying incurs costs which might impact the size of your deposit."
[sourcelink]
http://www.guardian.co.uk/money/2013/feb/15/extending-your-house-moving-20132.

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