Go mortgage free? if so sell now with planning?

davilown

So in a fortunate position to have bought a place that has lots of potential but now because of the area it's in and it potential, the price has gone up significantly (based on next door selling price this month as identical house and position).

We have planning for 2 extensions and a new garage but this will probably cost around £100k to complete to a good level.

Would you sell now, or complete the build then sell (or even complete build and stay with mortgage!)?

House cost £375,000
£10,000 initial renovations
Next-door sold for £465,000 this month
Estimated resale with pp £495,000
Extensions and garage build costs circa £100,000
Estimated resale price of £625,000

Potential to walk away with £260,000 after fees with our build or ££285,000 after build. The cash for the build is from inheritance and savings - no extra borrowing so add £100,000 to both these amounts.

Really decent houses in good areas around £385,000 to £500,000

Input gratefully appreciated

The place backs on to a golf course and is on the border on a national park. Great pubs and walks.

JennyP

So if you went to the effort of doing the build, you'd only walk away with an extra £25k?
Given that a build can easily go over budget, it might be less.
If I were you, I'd try selling it with pp and see if you can get the price you're hoping for. If it didn't sell in a few months, you could always opt for the build then.

dunroving

JennyP wrote: »

So if you went to the effort of doing the build, you'd only walk away with an extra £25k?
Given that a build can easily go over budget, it might be less.
If I were you, I'd try selling it with pp and see if you can get the price you're hoping for. If it didn't sell in a few months, you could always opt for the build then.

+1 No brainer.

davilown

Thanks for your comments - I know it makes sense but area is really nice and would never be able to afford to move back there

ProDave

If house prices where you are have risen, then so too would the price of the next house you buy, so you would not be better off unless you move to a cheaper location.

I really don't think the act of getting PP for an extension will add much value. The value is in having the land to build that extension, which it will have had when you bought it.

Personally I think the extra land is priceless, I would stay there. One day you might actually want to build the extension because you want more space, not because you think it will make you money.

JennyP

It sounds Luke you really like the area and do not really want to leave. Do you actually have to do those renovations or could you live in the place as it is?
If you could live with it, you say you have £100k for the build. Why not pay that off your mortgage instead? Maybe you still wouldn't be mortgage free, but it's a huge reduction and you get to stay in the place you like.

dimbo61

Moving is very expensive.
Selling costs, buying a new property, stamp duty, then the costs of getting a new place How you want it !
Do you need or want a bigger home ?
Will the work give you the perfect property for your needs ?
You have the plans and planning permission, you have the money for the work ?
Can you live in a building site for 6/9/12 months ?
It your happy with your home STAY

davilown

ProDave wrote: »

If house prices where you are have risen, then so too would the price of the next house you buy, so you would not be better off unless you move to a cheaper location.

I really don't think the act of getting PP for an extension will add much value. The value is in having the land to build that extension, which it will have had when you bought it.

Personally I think the extra land is priceless, I would stay there. One day you might actually want to build the extension because you want more space, not because you think it will make you money.

Thanks - the plot is really good and we could buy a bigger house in a 70s/80s development within 500 metres but I think you're right. We need the room as its a 2 bed and this will make it a 3 bed (and double the floor space)

davilown

JennyP wrote: »

It sounds Luke you really like the area and do not really want to leave. Do you actually have to do those renovations or could you live in the place as it is?
If you could live with it, you say you have £100k for the build. Why not pay that off your mortgage instead? Maybe you still wouldn't be mortgage free, but it's a huge reduction and you get to stay in the place you like.

We do but we also need the extra room (its only 780 ft2) and the extensions will make it about 1500. The mortgage is very manageable with a good fix for 5 years and we're not even in our 40s yet so the extensions would be the best way forward if we stayed.

davilown

dimbo61 wrote: »

Moving is very expensive.
Selling costs, buying a new property, stamp duty, then the costs of getting a new place How you want it !
Do you need or want a bigger home ?
Will the work give you the perfect property for your needs ?
You have the plans and planning permission, you have the money for the work ?
Can you live in a building site for 6/9/12 months ?
It your happy with your home STAY

Totally agree - in the region of £18,000 I think just to buy/sell. We need the extra bedroom and the kitchen is tiny with no dining space so both extensions are needed though one at a time is quite feasible.
We have the money to do the work and I have the time to project manage it and just get the contractors in myself.

Doozergirl

Extend the house, live in it. You have convinced me, I presume you have convinced yourself!