Go ahead with loft conversion or no?

rapple

I have 2 kids and am currently in a 2bed house. The house is quite small and as my baby is now nearly 18m and still in our bedroom, so we really need another bedroom. We had considered the pros/cons of doing a conversion vs moving and decided we rather stay we're at.

We have everything ready to do a loft conversion in mid April. The cost of this is nearly all of our savings (although we should still have a bit of a cushion). Im worried though as we are undoubtedly about to have a recession, house prices may stagnate/fall (we live in Edinburgh and house prices are generally more reliable here and never really fell in the last recession). We will likely be in this house for the next 10 years because it's near a primary school we like. So a temporary house price drop isn't too much of a concern. I'm really wondering if it is it foolish to blow through nearly all of our savings right now. Our jobs are reasonably secure, but with anything there are no guarantees. 

Also, im wondering about some of the practicalities. We have to move to a flat (from 6 April) temporarily during the build and will be paying rent on top of everything. So if the government decides to wait till then to go into lock down, that makes it more expensive rent-wise and it's tricky to be in lock down in a flat that's not our home. 

Also, my husband and i have to work from home now, so if we can't get someone out to switch on the internet at the temporary flat, that would make it impossible to work. I don't know what we would do, except defy protocols and pretend we're going to the grocery store when we're really going to our house to work?  But then, our government might never put us in lock down in which case all this worry is for nothing. And the older my youngest gets, the more desperate the space situation in our house becomes. 

Thoughts? Should I try to delay/cancel my loft conversion or should we go ahead. 

Windofchange

Think you've probably answered your own question - stay and do the loft conversion. You like the area, you want to stay in the house, you don't think prices will fall anyway. You say we are undoubtedly about to have a recession, but based on what? It's certainly possible, but undoubtedly? You are also wanting to stay put for at least another 10 years, so even if there is a recession, who cares as long as you can still service the mortgage! 

Internet is no problem - one of you must have a modern mobile phone in this day and age with tethering ability? It won't be much crack for streaming Netflix over all week long, but it will certainly suffice to send e-mails, browse the internet etc etc. I used my iPhone data for two months in this fashion when I moved into a new build where the utilities weren't connected up properly yet. 

If you are really worried, it sounds like the thing to do is delay your loft conversion for 6-12 months whilst all this blows over? If a lock down happens, it will likely be for a month or two, not an extended period of time, and even then, I don't know feasibly how they are going to police the entire country to make sure nobody is sneaking out of their house! 

Thrugelmir

If the value of your property falls so will others. Upsizing is in fact easier. By repaying debt you'll have more equity to hand. Downturns occur for any number of reasons. This won't be the last in your lifetime. .
Do what's right for yourselves. No amount of money can ever replace lost time. 

rapple

Windofchange - i couldn't post links, but Google recession and coronavirus and you'll find a bbc article and Reuters article saying that the UK as well as several other countries effected by coronavirus are currently in a recession. So question is how deep/long will the recession be. 
Also, i totally agree with Windofchange in that I'm probably answering my question, but up selling in the near future is really unlikely unless house prices completely collapse (which again is unlikely given Edinburgh's housing market). We can only afford the house we're in currently because my company offers a colleague rate which with the benefit in kind tax works out to be similar to the best mortgage rates. My company is closing the colleague rate to new applications by the end of this month. So if i were to move in future, i would have to pay a higher interest rate. So moving isn't really an option, unless we were to move outside the city and my husband and I thought long and hard about this and decided moving to 'the burbs' wasn't for us. 

So i guess the question really is whether to build now or to delay by 6/12 months when there is hopefully less certainty. Maybe even the cost of the build could go down (not sure if this is the case) 

Thanks so much for your input guys, just writing my thoughts out and hearing responses is really helping mw firm up my thoughts. 

CarbonImage

I am currently considering this (although not necessarily on the same time scale as you). Ultimately I think the question is this: Would your current house be the perfect house if it had a loft conversion? If no, I think you need to see if the perfect house is out there - perhaps when the dust settles a bit on the current political/health situation. Having said that it does sound like you were fairly set on the conversion before all of this happened. 
I would be delaying the conversion for 6 months or so and picking up this decision then. At the end of the day this is not just a financial decision but a practical one, and I don't think moving into a flat right now is a very practical option! Your construction firm is also very likely to be disrupted. 

itchyfeet1000

I would wait a few months to see what happens and then do the conversion when things have settled down, house prices might fall but I can remember the last time they did in 1990 to 1994 and it took most of that time for the full drop to happen, it doesn't happen overnight and you need somewhere for your growing family now.

anonymous12124

The common sense approach for almost everyone right now should be to wait a few months. It might not be possible for some but most people need to see the post Covid market situation before doing anything.