The million dollar question we’re often asked by homeowners is whether they should move to a bigger property or extend the property they currently own.
Here at Starkey&Brown we have no definitive answer, but can offer some advice which will hopefully answer that question.
How much will an extension cost?
Presumably you’ve had written quotations for the planned work and have some ideas of who will carry out the necessary building work. Once you know the cost you can start to think of it as a financial investment.
Property has, what is called, a ceiling price. This is the maximum price someone will pay for that type of property, with that many bedrooms, in that area.
If a loft is being converted at the cost of £20,000, you can’t assume that you will automatically smash the postcode ceiling price.
You can make a property easier to sell, but you can’t pay £10,000 or £20,000 for a new conservatory, extended kitchen and just add that to your own valuation. Unless you’re in an area seeing exponential price growth, an extension won’t pay for itself in the short term.
How long do you plan to stay in the property, your home?
If you plan to stay in your home for three years or less, an extension, unless absolutely necessary, may not make financial sense.
If your next move is in 10 to 20 years (people move on average every seven years), an extension will pay for itself, with current annual property price growth of around 4% per annum.
Do you know the current value and expected value after extending?
Finally, do you know your current property value? Has your property been valued recently? Has a good local estate agent visited you to talk current values and future price growth?
By valuation, we mean what your property may realistically sell for, not a higher figure thrown at you to make sure you list with that particular estate agent.
If you would like a free realistic valuation on your property please click here, or call the Lincoln office on 01522 845845 or Scunthorpe’s office on 01724 856100.