Should I stay or should I go?

The last 18 months or so may have made you realise that you need more space for both you and your family, with some preferring to stay put, rather than move.

The upside of this is that your current property may have increased in value compared to when you took out your existing mortgage deal. If that’s the case, then it may be easier for you to borrow extra money (if needed) to help create the space you want.

Property Price Rise

For example, if you’re coming to the end of a 5-year mortgage deal, the average house price in December 2016 was about £206,000, by December 2021, it’s around £255,000. (Source: Nationwide, House Price Index, December 2021)
If you borrowed 70% LTV in 2016, then by 2021, you’ll be under the 60% LTV threshold, which opens up the better deals. Or, you can take a view that you are able to meet the borrowing criteria, and are comfortable with a 70% LTV deal - thereby releasing around £30k+ of extra funds.

Of course, taking on extra borrowing may not be the most suitable route for you.

Additionally, if you remortgage before the end of the deal period there may be financial penalties. So, you have to weigh up all of this, along with the alternative costs attributable to moving home to secure the space you need.

Build up or build out?

This would be the most obvious way to secure the extra living space you need. And whilst it’s likely that there are planning and building regulations to consider, the planning aspect can be less onerous these days if you remain within an accepted footprint, and keep your neighbours onside.

Extension

This could create an extra room for an office, or simply be an extension to the kitchen area to help create more space. Rough costs: according to mybuilder.com, a standard 6m x 4m extension could cost in the region of £26-34,000.

Loft conversion

This can create a master bedroom with en suite, be used as an office, or simply deliver an extra room(s) to ensure everyone isn’t always on top of each other!

Rough costs: according to mybuilder.com, this costs on average £40,000

Wide-ranging renovations

Alternatively, you may want to do more, such as extend and update your kitchen, rewire, new heating system, new windows, and so on, to ensure the home layout works as best as possible for you.

Rough costs: according to Checkatrade, against a 3-bed property, this might cost in the realms of £38-74,000.

Does it add value?

Generally, it should. With an extension, or loft conversion, you are delivering more space, which should, understandably, make your home more marketable.
(Sources: mybuilder.com website & Checkatrade website, both September 2021)

You may have to pay an early repayment charge to your existing lender if you remortgage

Your home may be repossessed if you do not keep up repayments on your mortgage.

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