Nick Knowles: How to decide whether to ‘improve or move’

There comes a time when every homeowner must ask themselves an important question: do we move or improve? Perhaps the family has grown and you have always dreamed of a kitchen-diner, but an extension seems expensive and disruptive. But moving home to get that extra bedroom could be costly too, not to mention stressful. The truth is, there is much more to the question than numbers in a spreadsheet. So here is the maths that any homeowner facing this dilemma really needs to do: Shorts The building maths There’s no getting away from the fact that costs have risen drastically over the last few years. So don’t listen to anyone who tells you they got an extension done ten years ago for £30,000. Realistically, an extension is going to cost about £2,000 to £3,000 per square metre these days. A 20 square metre extension on your home could cost up to £60,000, and a 30 square metre one between £54,000 and £95,000. It’s not just the cost of the build. You’ll need an architect, ground survey and all the fixtures, fittings and furniture. Be sure to cost out the entire project before you enlist a builder – a good one will likely be booked up at least six months or a year in advance, so you have plenty of time to do your homework. The neighbourhood maths It’s not just whether you can afford the build; it’s whether it is worth it. Every street has a “ceiling price”, based on the area, the types of property and previous sold prices, and factors such as the parking and the local schools. It is possible to bust the ceiling but not always. Just because you put a £90,000 extension on your £500,000 home, it does not guarantee that it will now be worth £600,000. Having said that, this is not necessarily a reason not to do the work. It might be that your £90,000 extension only adds £50,000 to the value, but it may still be worth doing if it means the house now works for you. While you don’t want to be throwing money away, it’s not only about the money – it’s also about your quality of life. Also bear in mind that if you are staying for the long term, and house prices continue to rise over time, then even if you don’t get an immediate “return” on what you have spent, it may be worth that in the future. The admin maths It’s not just house prices you need to look at when you move. The estimated average cost of moving in the UK is about £15,000, and can often be considerably more. Stamp duty on a £500,000 home, for example, is £10,000. Typical conveyancing fees for a home move are about £2,500, while surveys can be £1,500 or more. Removal costs for a family home come in at £2,000 to £3,500 and don’t forget estate agent fees, which are usually 1-3 per cent of your sale price. There are also ancillary costs like post redirection (about £90 per person per year) and cleaning costs, plus the hassle and possible charges for moving your broadband, phone line and TV deals over. If you’re moving further away from work, consider the extra cost of commuting and don’t forget to factor in the redecorating you’ll do at your next home – because nothing is ever completely perfect. So before you baulk at the price of building work, make sure you have done a fair comparison of the total costs of both sides. The emotional maths This is the most important part of the equation by far. We’ve got into a habit of seeing our homes as an asset, when it’s often so much more than that. Consider what your house means to you: maybe your family are close by, you have good connections with your neighbours, it’s close to the kids’ school, the commute is easy, and you enjoy playing for the local football club. These are the anchors in your life and moving may mean you have to start all over again. Renovating could allow you to keep all that, even if it means some upheaval in the short term. On the other hand, you might be restricted by the size of your home as to how much you are able to extend it to meet your needs. Or it could be that your family has grown or your lifestyle has changed; maybe you don’t need to be in the city centre any more and want to move out to the countryside. There are times when renovating means too much compromise. When a house stops feeling like home, then moving can be the right decision. When it comes to the choice between moving or improving, neither is an easy option – they both involve money, stress and disruption. But ultimately, the right decision for you will depend on much more than some numbers in a spreadsheet.