Financial implications of extending vs moving

cgray25

With 2 young kids I'm struggling for space in our current house so we were considering extending. We had our house valued at 230k (after 50k of mortgage its the same as we bought it for in 2008 ).

The extension we'd be looking at would be a ~25k. Of course, the stamp duty means there's a black spot between 250-260k, which we'd land right in the middle of. The estate agent said he wouldn't extend because 250k will be the ceiling price for the property and we should sell instead. But he would say that. And that's just the ceiling now, and it's not much of a value difference anyway.

I like where we are now but I know we'd still likely need to move within a few years. Part of me thinks it might be better to move now though (financially) - whilst the recoveries will be relative for both the properties bought/sold, IMO the houses we'd be moving to will see more of a jump once things start moving again (or maybe if!).

Decisions, decisions

Kynthia

Difficult one. There are financial and non-financial pros and cons so perhaps make a list.

Non-financial considerations:
If you moved would you get a house as good as the one you've got now, such as location to schools, work and family?
If you extend you'll have to live in a building site for months.
Do you love your house enough to stay there even if the extension cost more than it increased the value of the property?

Financial considerations:
Will the work add the same value or more to the property value?
Will you be staying long enough for the property to move out of the stamp duty region and then better realise the value of the works?
Will buying and selling costs impact whether buying somewhere new is a better financial decision?

cgray25

Thanks Kynthia. It's a head/heart thing - heart says stay, head says moving might be better long term. We got on the ladder relatively early for our generation but incredibly bad timing and bad luck on our last property has meant we must be the only people to have owned property for the last 8 years and not gained a penny on either. I don't want to compound this with another bad decision - or missing an opportunity.

But then, money isn't everything...shocking, I know