Really struggling whether to do a loft extension or buy a bigger place. Need the opinion of others!

JadeHighland

Husband and I are both 38 and have two children 7 and 9. Live in Havering and have a joint income of just over £8,300 a month, save £2,000 a month and after everything goes out, have around £1,000 each in discretionary income (on paper anyway. Children, needed house repairs and more often take a good chunk out of this).

Mortgage, less than 8 years left on a 2 bedroom property and currently paying around £1,400 a month. Equity is around the £210,000 mark. Kids are getting older so we want to make a decision on moving or the loft extension this year.

All in, loft extension will cost around £70,000. About £50,000 of it we'll fund with cash we have and the rest through a loan. This has been the preferred option as we don't like the idea of borrowing the same amount we borrowed to buy our current house. Also, means we don't have to consider extending the mortgage.

Buying a bigger house, the only ones worth it in our area are at least £550,000. The main draw for me is having a separate dining room to the kitchen and, to a lesser extent, our own driveway. If we keep the term of our mortgage the same (8 years) we paying just over £1,000 to what we are paying now. That's something we are comfortable with.

Any suggestions? Happy to give more info if wanted

Markdavid1962

Have any properties in the area already done this loft conversion and what is their house value now, ie if your house only goes up £40k in value, would you be happy with that. Make sure you get a reliable builder. I would get three quotes and compare

Selling and buying a larger house, remember all the fees including selling fees, solicitor fees etc.

With the kids getting older and schooling, have you considered zoning (catchment area) for secondary school, especially if you decide to move house

grumpy_codger

Think in terms of the costs (=interest), not monthly payments. And don't forget EA fees and the stamp duty.

Ms_Chocaholic

What savings do you have and what rate are you getting on that versus the interest rate on your mortgage. Is it worth paying a chunk off your mortgage?

JadeHighland

https://forums.moneysavingexpert.com/discussion/comment/81990751#Comment_81990751

I could do, but that doesn't solve the issue around the extra bedroom.

WIAWSNB

As said above, compare everything the two options will give you:

Current home + loft: 3 beds. Same kitchen/diner. Known costs. Known location. Overall less hassle. Shared/no driveway.

New home: 3 beds. Separate kitchen & diner. Known costs. Possibly unknown location. Private drive. Hassle of moving.

For each, also work out the total cost to you, and the expected valuation of the improved current home. Compare.

And anything else I missed. Make this a 'head' decision to begin with. Then add some heart as you fine-tune.

anselld

Loft conversion is always a compromise - loss of space for stairs, extra storey, fire doors, reduced head height, limited insulation, etc, etc. If you can afford it (and it looks like you can) I would always prefer to move.

Bigphil1474

Agree with above. Your finances sound healthy and a newer bigger house is affordable. You will have some stamp duty to pay - about £17k on a £550k house, but you realistically make that back within a few years. (If houses go up by say 3% a year on average, a £550k house makes £18k a year compared to £10k on a £350k house, in simple terms). There is some cost to moving, but at 38 you've hopefully got many years to enjoy a new better place. Plus you wouldn't have to put up with the building work.

We moved a couple of years ago. Previously lived in a 2.5 bed terraced house for 30 years which was all we could afford at the time and we made do. Both my partner and I inherited a reasonable chunk of money which gave us the push to buy the house we wanted rather than what we had to make do with. Totally changed my outlook. We now live in a lovely 4 bed semi in a semi rural setting, no houses overlooking our back garden, and impossible to ever happen, street is quiet on a night, got a drive way for the first time (awesome), and the street isn't full of parked cars fighting for space. We've both got our own space to follow our hobbies, I've got a nice home office, and the house is around 60 years newer so no more expensive for utilities. Also got the lovely big kitchen I'd always wanted.

Silvertabby

You can't turn a 2 bed starter home into a 3 bed family home just by by adding a loft conversion. Your ground floor living space will still be the same, and you will have lost some of the first floor space to the loft stairs.

I would move into a bigger house if your finances allow.

gwynlas

Some loft extensions make homes appear top heavy with increased number of bedrooms but no increase in living space. In others loft extensions appear to be logical and suit the property. Can you look at comparables near you?

Personally if affordable I would go for an overall larger house as this gives you more options going forward as to how you use the space as a family

horsewithnoname

I’d think about what is best for your family, of course you need an eye on the financial impact, but your home is just that; your home, not an investment, so think about what is best for your family first and foremost. Whatever you decide, as long as you can afford it, do what suits your family