Planning an extension on a house we haven't bought yet

stotherd

Hi,

We're looking to buy a 4 bed house in our area  (south of Leeds) but can't find any in an area we would like, so we were thinking of a 3 bed property which has the space for a double extension to give us the space we need. How would we go about financing an extension of this size? We have enough equity in our current home to cover the deposit and an additional £15-20,000. We would need to loan the rest but would we be able to extend our mortgage to cover it? Are there other way to finance this?

It would involve a new larger kitchen, a dining room, a bathroom, and a new master bedroom and I'd estimate it would be about 40-50 square meters of space on each floor. Some quick estimates online bring that to around £50-70k, but obviously we take that with a massive pinch of salt.

We're also aware we would need planning permission and a survey to assess if its actually possible, are these possible before we agree to buy?

saajan_12

stotherd said:

Hi,

We're looking to buy a 4 bed house in our area  (south of Leeds) but can't find any in an area we would like, so we were thinking of a 3 bed property which has the space for a double extension to give us the space we need. How would we go about financing an extension of this size? We have enough equity in our current home to cover the deposit and an additional £15-20,000. We would need to loan the rest but would we be able to extend our mortgage to cover it? Are there other way to finance this?

It would involve a new larger kitchen, a dining room, a bathroom, and a new master bedroom and I'd estimate it would be about 40-50 square meters of space on each floor. Some quick estimates online bring that to around £50-70k, but obviously we take that with a massive pinch of salt.

We're also aware we would need planning permission and a survey to assess if its actually possible, are these possible before we agree to buy?

The simplest would be to borrow more than your current mortgage balance and use the rest for the work, but need some more figures to advise whether that's feasible:
* max mortgage size based on your income / affordability?
* current mortgage balance
* new property value
* current property value 
* other savings

Re assessing feasibility of works beforehand: 
* survey definitely doable and I'd recommend doing this
* planning permission - can be raised by anyone, though note this may take time and incur costs. The seller may not want to wait for a this, and may relist. 
* party wall agreement - notice can be served by the owner or an interested party, so could also be done beforehand. However if the neighbours disagree, then this may also take time to get surveyors on both sides to review. 

stotherd

Max mortgage is likely to be around £335,000
Current balance is £102,000 ish
New property is on the market at £230,000
Current property has been valued at £160,000
We only have around £6000 saved - I'm hoping to have that topped up to £10,000 by the time we complete.

Cypruseast

stotherd said:

Hi,

We're looking to buy a 4 bed house in our area  (south of Leeds) but can't find any in an area we would like, so we were thinking of a 3 bed property which has the space for a double extension to give us the space we need. How would we go about financing an extension of this size? We have enough equity in our current home to cover the deposit and an additional £15-20,000. We would need to loan the rest but would we be able to extend our mortgage to cover it? Are there other way to finance this?

It would involve a new larger kitchen, a dining room, a bathroom, and a new master bedroom and I'd estimate it would be about 40-50 square meters of space on each floor. Some quick estimates online bring that to around £50-70k, but obviously we take that with a massive pinch of salt.

We're also aware we would need planning permission and a survey to assess if its actually possible, are these possible before we agree to buy?

Probably safer to work off approx £1000 a sqmt particularly if there is new kitchen and a bathroom involved - all require plumbing, electrics and involve a lot more expense than a standard space. I’d suggest you should be budgeting £80-£100k for what is quite a large extension. I’d suggest your £50k-£70k is very optimistic and probably unrealistic tbh. 

Doozergirl

Cypruseast said:

stotherd said:

Hi,

We're looking to buy a 4 bed house in our area  (south of Leeds) but can't find any in an area we would like, so we were thinking of a 3 bed property which has the space for a double extension to give us the space we need. How would we go about financing an extension of this size? We have enough equity in our current home to cover the deposit and an additional £15-20,000. We would need to loan the rest but would we be able to extend our mortgage to cover it? Are there other way to finance this?

It would involve a new larger kitchen, a dining room, a bathroom, and a new master bedroom and I'd estimate it would be about 40-50 square meters of space on each floor. Some quick estimates online bring that to around £50-70k, but obviously we take that with a massive pinch of salt.

We're also aware we would need planning permission and a survey to assess if its actually possible, are these possible before we agree to buy?

Probably safer to work off approx £1000 a sqmt particularly if there is new kitchen and a bathroom involved - all require plumbing, electrics and involve a lot more expense than a standard space. I’d suggest you should be budgeting £80-£100k for what is quite a large extension. I’d suggest your £50k-£70k is very optimistic and probably unrealistic tbh. 

No, no, nooooo!  £1,000 a metre is also complete pie in the sky.  That is a decades old assumption of a big standard square box new build without any VAT.    Not only is it ancient, the whole building industry has been slapped with materials price increases of 15% in many areas over the last year, and in some cases more.  

A minimum of £1,500 a square metre *easily* applies.  80-100 square metres is also the size of a small house!   The OP is well into 6 figures without even beginning to account for new kitchens and bathrooms.  

OP, I don't know where you've got an estimate anywhere for 80-100 square metres at that price.    Financing it doesn't look realistic at all, but I also suspect that you'd be losing money on the house by doing it.  

Have you looked at the Homebuilding & Renovating Calculator?  What does that suggest based on the correct number of metres? 

saajan_12

stotherd said:

Max mortgage is likely to be around £335,000
Current balance is £102,000 ish
New property is on the market at £230,000
Current property has been valued at £160,000
We only have around £6000 saved - I'm hoping to have that topped up to £10,000 by the time we complete.

Okay so affordability won't be your limiting factor, its the LTV. 
You have 58k equity + 10k  savings = £68k
Assuming 90% LTV, you need 23k deposit + say 5y on buying / selling costs = £28k
--> Leaving £40k for your renovation works. 

Beyond that, you're looking at unsecured loans, which will be much more expensive, for a good chunk of the cost of the building work. Looks like a no go to me, you'd need to look at a higher value property and perhaps smaller extension needed. 

AHT2020

Just some personal experience in relation to the cost of extensions; we extended our three bed semi detached house in 2018 with a one storey rear extension replacing an old conservatory and a two story side extension replacing a garage and lean to. Our architect did the drawings in 2015 and estimated somewhat unrealistically that it would cost around 60k. The cheapest quote was 130k including VAT, we’re in Surrey so potentially more expensive but most of the quotes were 150k before VAT.