Extension - would it add value to the house if selling in the future?

JGB1955

I would have expected an extension of that size to cost over £70,000....particularly if a new kitchen is involved.

GDB2222

JGB1955 said:

I would have expected an extension of that size to cost over £70,000....particularly if a new kitchen is involved.

In large parts of London, residential property sells for over £500 per sq ft. The OP claims that he can get his extension built for £70 psf. Hence, it looks likely to enhance value by more than it costs to build.

peterhjohnson

pasok11 said:

We are thinking if we add extension - this would make our lifestyle perhaps more comfortable, but would cost around £35,000-40,000, would this add value when selling the house? we live in London. 

"Improving" a house can often increase its value a bit.  However, for the private owner, the increase will usually be nowhere near the cost of the work.  If you wait long enough, the increase may look like a decent profit but it isn't really, you're just seeing how cheap building work was years ago against house price inflation.

You are on a much better wicket thinking about the lifestyle advantages to you against the costs - as you seem to be doing.

Another option is to consider buying a house that is up to the standard you'd like already. It could be that the vendor has had all the expense and hassle of improving it some years ago. They will think they are making a fat profit and you will be getting a bargain :-)

Crashy_Time

Turn on Bloomberg news, listen to some of the predictions for global GDP going forward, and just save your money IMO.

SouthLondonUser

It is a common misconception that spending X on the house will increase its value by more than X. Well, sometimes yes, but not always.

In fact, the world is full of properties where doing works added zero value, or even actually reduced the value. E.g. I know some people who spent loads on a massive kitchen extension, but the garden is now tiny, less than half that of their neighbours. IMHO such a house is worth less. I know another person who bought a house with very high ceilings, and did massive works to add another floor (from 3 to 4!) to gain one extra room; similar 4-beds on 3 floors were worth less than what he paid to buy + do the works, plus there's the fact that not many people want a house over 4 floors.

As always, you need to look at comparables. How much are similar properties (pre-works) worth ? How much are those properties which were already refurbished the way you want to refurbish yours.

Ah, of course all of this is in general, pre-Covid. Now, with Covid, who knows...

Doozergirl

GDB2222 said:

JGB1955 said:

I would have expected an extension of that size to cost over £70,000....particularly if a new kitchen is involved.

In large parts of London, residential property sells for over £500 per sq ft. The OP claims that he can get his extension built for £70 psf. Hence, it looks likely to enhance value by more than it costs to build.

At that price, I think that the OP's house is on another planet, not in London!  

pasok11

Thank you, will look at comparables. A lot of work will be done by my husband ( labour), hence we think it would cost around £40,000. We need lodgers as paying for kids education etc, salary not enough. 

Slithery

How much are you planning to charge your lodgers?
Surely it would take nearly a decade at least to just break even...

pasok11

a good question,  I calculated, it would take around 5-6 years to break even...I am thinking that in around 6 years we might want to sell, as children would then be older etc....in this way we could sell the house for a higher price ( hopefully). I realise that it all depends on market etc. I was considering perhaps selling this house and looking for something that is more suitable for us, but the prices are probably going to be low for selling the property...

numbercruncher8

Not sure it'll be as easy as that. Maybe in the past.
3 lodgers creates a HMO, which brings its own regulations. Not sure having a family of 4 on the ground floor of a property is going to meet requirements.
Depending on the rent, taxation also comes into play, it may not really work out that efficient to take in a lodger over the allowance.