What Would You Expect For 50 Grand?

AndyBSG

After some advice here on if my figures are just out or if my expectations are unreasonable.

First up the background.

- Purchased a 3 bed terraced house in March 2015
- 2 Double bedrooms
- 1 single 'Box Room'
- Driveway parking for 1 car plus a garage
- Price paid, £250,000
- Location Chelmsford, CM2 postcode, Essex, 30 minute train journey from central London

Now, 2 kids later, we're at a crossroads. The property in question has a large open plan living/dining room but the kitchen is a single storey galley kitchen off the rear end of the building, essentially jutting out to form an L shape.

Our mortgage is currently £175,000.(We put a 50K deposit down and have paid off 25K).

We now have two options.

Option 1 - Extend out the back, bringing the entire ground floor out level with what is currently the end of the galley kitchen. At the same time we would look to renew all the existing double glazing, replace and modernise the entire central heating system(half the radiators don't seem to work properly, and it doesn't have a combi boiler or thermostat, just a timer system), possibly get new fascias and soffits and also add a front porch. This will give us much more living space but obviously won't fix the lack of second bathroom or the small size of the third bed room which are our main issues.

Option 2 - Move to a bigger property in the same general area.

Now the big issue is that I do not want to increase the length remaining on my mortgage, so would only want a 22 year mortgage, not a new 25 year one. Additionally I do not want to increase the monthly amount by much more than a token amount.

So, essentially any extra budget will have to come from savings.

We currently have just over 50k squirrelled away.

For me to move I would want the following

- Off road parking for 2 cars, rather than the 1 we currently have
- A larger 3rd bedroom
- A garden with a lawn(ours is currently all decking and paving with no actual grass)
- A second bathroom

I'm estimating our house at 300K based on roughly what i've seen of other houses in the area(Zoopla estimates it at 315K with 99.5% confidence but no idea how reliable that is)

So, i'm probably looking at houses in the 350-375K range or maybe up to 400K in the hope I can knock them down by at least 15K.

Surely for an extra 50K 1 extra off road parking space, a second bathroom and a bigger bedroom is achievable? However I seem to be coming up blank on all property searches so I wonder if i've actually underestimated what my house is now worth?

Most of the houses I look at in that price range within 5 miles of our current location are either no bigger than ours, need lots of modernisation or are are in undesirable areas.

Am I just being unreasonable with what an extra 50K should get me?

Comms69

Well not in general terms. But if it doesn't exist, then that's that.


Are you dead set on the area, that kind of money would buy very large properties further north

need_an_answer

If you put the £50k in to renovating the property you currently have would you enjoy living there afterwards?


Theres a lot of expense in moving so sometimes renovating is a good idea but only if the finished result meets your needs and more importantly your expectations.

Ive done a complete renovation in the past and yes I loved it come the end but essentially it was still the same house,just a little better planned for how we needed it at the time.

I guess if you crave something like driveway parking and you cant get it unless you move renovation isn't for you.

Sometimes you find that there is a big difference in price to get the third "big bedroom" simply because it does put you in a different league of house...extra council tax bandings,higher utilities possibly..essentially the two children each have a decent sized bedroom and you may even get that box spare room.....lots of 2 children families crave this so hence the price can certainly be higher in a good area than the £50k you have to spend on it.

Renovating your existing property in the short term is unlikely to add any more value to it than you put in but it will give you the layout if that's what you want and to some people a good layout is certainly worth the cost and upheaval whilst its done.

Do renovation projects come up in your area very often of the size of your house you want to move to....and would you be able capable and prepared to put the work into getting it up to standard?that might be where your compromise lies.

I guess it really comes down to the old adage move or improve and only you can make that decision.

gingerdad

the stamp duty will alone will use up 7,500 - 10,000 of your £50k before you even think of estate agents fees ect.

we spent £50k on a loft conversion and extra bathroom but looking to move and get the same was between £75-100k

and i'm not in the south east.

trailingspouse

Any particular reason why you don't want to extend the mortgage term back to 25 years? If that's what's stopping you from finding the house of your dreams, that seems a bit short-sighted?

lincroft1710

You have more than 2 options

1. Do nothing other than renew/replace outdated or expired aspects of the house and re-landscape the garden and poss see if you can extend car parking at front into side by side. Make better use of existing living/storage space and de-clutter.

2. Extend, but see if you can add 2 storey extension to incorporate 4th bedroom or larger 3rd bedroom, shower room or cloakroom.

3. Look at exactly what £50K will get you and decide whether it is worth the effort of moving

4. Look at how much extra you need to pay to get your "ideal" home and decide if it is worth the the extra financial burden.

For 3 and 4, also look a little further away from your preferred area(s)

AndyBSG

trailingspouse wrote: »

Any particular reason why you don't want to extend the mortgage term back to 25 years? If that's what's stopping you from finding the house of your dreams, that seems a bit short-sighted?

Our retirement plans pretty much depend on us being mortgage free by that date.

If we did decide to do the extension and improvements then the house would be much better suited to our needs, but the option of increasing the size of the box room or going into the loft is a no go.

The loft is a very shallow pitch and being terraced there is nowhere internally we could add the required staircase.

We're basically looking at crunch time in about 3-4 months when if nothing has come up we'll have to consider the renovations but the main worry is that things like new heating, double glazing, roofline and electrical rewiring isn't really going to add anything to the value, if anything the work would cost more than it adds to the property value.

The extension itself would also probably push us right to the market cap for our road and also possibly not even break even on the value added.

In essence, we'd probably never see that 50 grand back unless we end up staying for close to a decade so once we do make that decision we'll basically be stuck there.

Unfortunately, relocating to a cheaper area really isn't an option as our current location is smack bang in the middle of both our families and both our jobs.

Just seems a very bitter pill that what I would call a very significant amount of money at £50K that we've literally broken our backs to get really can't improve our home quality by what I would think are quite modest criteria.

diggingdude

If you are only worried about house price don't extend as it is not a guarantee you will get your money back

sal_III

If bigger properties were never build in your area in the first place, no matter how much you search in Zoopla you won't find them. Have you actually seen bigger properties while walking around? If so, maybe print and drop some leaflets, someone might bite.

So you prefer to stick in your current property and be "miserable" for the next 20 years instead of risking your retirement plans by getting a longer mortgage now. You know that you can overpay it, potentially with some of your pension pot if it's so critical. Or you maybe downsize from the larger property and retire just the same mortgage free after 22 years.

tlc678910

Hi,
Have you saved 50k in the four years since you moved into your house? If so why not continue your property search and keep saving, even if you can't continue to save at the same pace.

By the time you find something you like you may have saved a bit more to stretch a bit further or to do a little work on the property you find.

Tlc