One of the big debates, when you need more space, is whether to move or extend your home. And if you are considering extending your existing home, how do you weigh up whether it is worth it or not? There are three main things to consider when planning an extension – the timescale involved, the financial cost and whether it is ‘worth it’ – but what does this mean?
Medium to long-term investment
When people talk about an extension being worth it, they often say it is a medium to long-term investment. That means five or more years. That’s because house prices double around every ten years so if you stay in your home for at least this period, then it will be financial ‘worth it’ to extend the house. Plus you will have enjoyed those years’ worth of use of the extension.
If you aren’t planning on staying that long, an extension can still be worth it because you are looking at the improvement in the quality of life in the house, the extra space rather than just the profit when you sell the house.
How to work out the value of the extension
How much you spend on the extension doesn’t directly correlate to the increase in value. An extension costing £50,000 doesn’t always mean your house will go from £100,000 to £150,000 in value. So how do you know what kind of increase you might see?
One idea is to look at the local housing marketing. Look for houses that have no extension and ones that have extensions. What is the price differences? Are these extensions similar to what you are planning? The increase in value from the house a to house b can give you an idea of the value of the extension – although also study other improvements made.
Cost or value?
You need to decide if you want to look at the cost or the value of the extension to judge it’s worth. Oak extensions would be a wise choice. For example, it may not add as much to the house in terms of value as you spend but it is worth so much more to have that extra space. Maybe it creates a home office that lets you build your business and significantly increase your income – that has huge value.
Sometimes you can’t put a price on the value an extension can bring. And this can make it more worthwhile than simply considering how much it might increase the value of the house.