Making money work harder in 2022

avantra

Here for some advice.

Since the pandemic, my wife's and I moved to a full Working from home model.
There are no signs that this working model is about to go (employers sold off most of their offices).

We decided to extend our three-bed semi to have a proper office to share.
We can start building in the summer or autumn, and early indication tells us that this will cost us up to £100k.

Financial background: We have £82k in easy access with Coventry BS (0.55%), income is around £91k/year between us with about £2300 outgoings a month; the rest is saved.
Our 1.84% fixed-rate mortgage is ending in June this year, and we have £60k outstanding.

For any building work, we intend on negotiating a fixed cost bill with some builders offer to be paid once the work is completed, which can take up to 10 months.

What will be the best way to get our savings money to work harder until we pay the builder? 
Assuming a new fixed mortgage in August will probably be around 2.5% at best, how much should we keep in an emergency fund and how much in short term savings/investment?
I predict we will pay for the extension around July 2023 in one lump sum.
Excuse my confusion if I didn't explain this better. I will try to answer any feedback.

Many thanks

Avantra

Thrugelmir

Over pay the mortgage. Then obtain a home owner loan once you need the money to fund the build and the project has been fully costed. . 

dcfc67

I have never known a builder to be paid when work is completed. 
Usual process is stage payments, do you really expect a builder to supply all the materials, pay for scaffold, lots of skips, pay the wages of groundworkers, bricklayers, general labourers, plumbers,  electricians, joiners, tilers, decorators etc etc and then you hand over 1 payment on completion

jimjames

If your mortgage ends in June you may well be able to move to or reserve a new rate 3-4 months beforehand so you might be able to lock into a better rate pretty soon rather than waiting until August.

As per previous reply I can't imagine many, if any, builders wait for payment at the end of their work for domestic developments. When we had extension it was stage payments

Thrugelmir

dcfc67 said:

I have never known a builder to be paid when work is completed. 
Usual process is stage payments, do you really expect a builder to supply all the materials, pay for scaffold, lots of skips, pay the wages of groundworkers, bricklayers, general labourers, plumbers,  electricians, joiners, tilers, decorators etc etc and then you hand over 1 payment on completion

Or potentially default and not pay...............

pokora

Just think about the extension for something more than have an office space. You never know if employers change of mind and decide to get back to shared offices or even if you decide to change of employer. It's a lot of money invested for suddenly have a change of circunstances.