Mortgage for extension

30andcounting

We have a 2 bed cottage that we are looking to extend and turn into a 3 bed with en suit, new kitchen and add a small extention on the ground floor with bifolds. Not sure on exact cost yet but probably around the 40K mark.

The area we live in has experienced decent levels of growth in prices, its quite affluent and the next step up for us is big. our 2 bed is valued around the £220k mark and could reach £300k or slightly more with the planned alterations. We have an o/s mortgage of £134k, will be around £130K next year when we plan to start. So in essence we currently have around 85K equity and a LTV of c60%.

We cant fund this out of our own savings, I am tempted to remortgage for the whole £40k, then potentially overpay for the first 12 months after using some savings.

I dont want the extention to cost spiral and we run out of money basically. How have anyone else in this situation approached it? We have a joint income of almost £70K and 1 child.

Thanks

Doozergirl

It's easy to spend £40k on a single storey kitchen extension.

I'd definitely be concerned about managing to build a bedroom and ensuite as well, for that price, if you're not building it yourselves. It could easily cost the £80k differential between your house and a house of the size you want.

It's worth investigating the design and cost before looking to extend your mortgage.

30andcounting

We have had a builder to assess it - along with some tradesman we know. He thinks 30, we arent extending downstairs, we are removing a conservatory and building a bedroom above that and getting a new kitchen fitted - nothing ultra plush as its not our forever home.

I was more hoping around the question of the idea of borrowing it rather than whether it will cost more than £40K, that is up to me to control. We are midlands so not south prices.

Thanks

30andcounting

we had a new bathroom fitted last year, did the whole thing for £2,500. Includes bath shower tiling. We bought everything ourself from bathstore in the sale and a plumber fitted and tiled it for £850, not a problem since touch wood. The plumber is semi retired, we got the tiles online in the sale. If you shop around there are bargains to be had.

Doozergirl

30andcounting wrote: »

We have had a builder to assess it - along with some tradesman we know. He thinks 30, we arent extending downstairs, we are removing a conservatory and building a bedroom above that and getting a new kitchen fitted - nothing ultra plush as its not our forever home.

I was more hoping around the question of the idea of borrowing it rather than whether it will cost more than £40K, that is up to me to control. We are midlands so not south prices.

Thanks

Part of your OP says that you don't want it to spiral out of control and have no money left. If you have the income and equity, then the mortgage isn't much of a problem, but realistic budgeting could be. Building project are renowned for presenting surprises, particularly when you're not building from scratch.

Are your conservatory footings suitable for a second storey? Most conservatories are built cheaply without regard for building regulations (because they don't need to comply) and have shallow footings. That may well mean underpinning what is there - which is expensive, or rebuilding it entirely, which costs more than starting with a patch of grass as you have demolition and breaking up the original footings.

I have been renovating and extending for 20 years, 16 of them in the Midlands, and I run a building company. I know expectation vs reality and I know builders who are incapable of pricing correctly and I also know that it's easy to underestimate on an initial glance. Unless that £30k is a solid written quotation, based on a structural engineer already having assessed the existing ground floor and having a clear plan and specification, I'd be very careful indeed.

It's not hard to find bargains in individual items, when you're looking hard enough, but labour costs are pretty fixed, are the majority of your costs and there's not often satisfaction to be found in people offering cheap labour.

30andcounting

Doozergirl wrote: »

Part of your OP says that you don't want it to spiral out of control and have no money left. If you have the income and equity, then the mortgage isn't much of a problem, but realistic budgeting could be. Building project are renowned for presenting surprises, particularly when you're not building from scratch.

Are your conservatory footings suitable for a second storey? Most conservatories are built cheaply without regard for building regulations (because they don't need to comply) and have shallow footings. That may well mean underpinning what is there - which is expensive, or rebuilding it entirely, which costs more than starting with a patch of grass as you have demolition and breaking up the original footings.

I have been renovating and extending for 20 years, 16 of them in the Midlands, and I run a building company. I know expectation vs reality and I know builders who are incapable of pricing correctly and I also know that it's easy to underestimate on an initial glance. Unless that £30k is a solid written quotation, based on a structural engineer already having assessed the existing ground floor and having a clear plan and specification, I'd be very careful indeed.

It's not hard to find bargains in individual items, when you're looking hard enough, but labour costs are pretty fixed, are the majority of your costs and there's not often satisfaction to be found in people offering cheap labour.

OK - thanks for the heads up.

With your experience - if i spent £40K and my house went up in value £80K would that be worthwhile, what are the expected returns on investment?

Thanks

need_an_answer

Be realistic with your costings.

Before you embark on major work get the quotes to support the price.


How have you costed the £40k at the moment?
Is it a case of that is what you would like the work to cost or are you sure the work will cost that?

Ive done renovations without building work and its very easy to want things to cost a set amount but the reality is things usually cost more than you imagine.
A contigrncy will be essential for you especially if you are doing the work in one go,there is nothing worse than running out of money with a half finished job or a shell that you cant furnish!

babyblade41

I suppose it's how good at sticking to a budget you are .

I am going through a very small kitchen extension and have ear marked 25k and that's the budget simple as. It's very easy to get carried away with so many gizmos and gadgets

This probably won't be my last move (I know I said it before) but in approx 5 years it will still be too big for our needs especially the outside space which for now is necessary .

Even if it were then we still get bored and want to change things

I would use cash and do what you can with that budget especially if you are moving on, but spend the money on important things rather than peripherals

Depending on where you are quotes can differ but a quote rather than estimates... you have to build into the build all the other costs of structural engineers, architects and planning .

Mine is literally 5 metres length with about 3 meters depth and just the architects and engineers costs are about 2.5k with just 2 walls and a roof with velux to put on and extending the wiring and plumbing

I think your budget is a little off and the hidden costs are the ones that bite you

need_an_answer

30andcounting wrote: »

OK - thanks for the heads up.

With your experience - if i spent £40K and my house went up in value £80K would that be worthwhile, what are the expected returns on investment?

Thanks

Are you doing this to live in or to sell on?

Why the need for a return on your investment?

If youre doing it to increase your living space and enjoyment of the property I'm not sure you need to worry too much over the investment side of it unless you were planning on doing the work and moving straight on to another property.

Property goes up and down in value but overall is a long term thing.

At the end of it what you have to be mindful of is in making your 2 bed a 3bed and extending you are placing it at the top end of what essentially is a 2 bed market...when coming to sell some people will love it and some will look at it that its got no further potential as its already been extended,and will therefore gravitate towards a standard 3 bed that perhaps comes with that little bit of extra space that hasn't been "shoehorned into a 2 bed"

30andcounting

Well ideally we want to spend the money to get some kind of return, so when we do move we can use that extra equity as our next deposit. This is a first time for us so hence the questions. It is to increase living space and probably extends our life at the house by 5-7 years..

foxy-stoat

Budget £1500-£2000 a m2 for a 2 storey extension.