Estate agent London News

extension

Budgeting for a Property Extension

Some people grow up with a clear picture of what their dream home looks like. Sometimes, these dream homes exist, but often they require some kind of finishing touch.

Once you have found a home to settle down in, especially if you have a family as well, it is worth investing in it for the long-term. The right extension can make your home more comfortable for you to live in and significantly enhance its value if you do it right.

There are lots of options available for anyone looking to extend their property, and the prices can vary wildly as a result.

  • What is the cost of a single storey extension?
  • How much does it cost to extend leasehold?
  • What about adding a conservatory as a property extension?

Let’s take a look at the key questions you need to answer in order to properly budget for a property extension, no matter how minor or major it might be.

Property Extension – Deciding On The Scope Of The Works

If you are going to budget properly, you will need to know the extent of the works that you will be undertaking. Without a clear picture of the scope and size of your property extension, you won’t be able to budget for it accurately.

The scope of the works will obviously depend on the existing structure, as some structures lend themselves more easily to the addition of an extension. Meanwhile, other structures will need some significant renovations themselves before any kind of extension can begin.

Property extensions can be just as varied as the underlying properties themselves; they come in all shapes and sizes.

If you have never done anything like this before, then it can be quite challenging to gauge the costs, so let’s take a look at the key questions you need to answer in order to make your decision.

To Extend, Or Not Extend my property?

So, the first question you need to answer is a relatively simple one – are you sure that you want to go through with this? Before you pull the trigger on a property extension, you need to consider what you want to achieve with it.

If you aren’t planning on staying in the property for the long-term, that doesn’t necessarily mean you should avoid investing in an extension, but you should be more careful about the works that you commission if you want them to add value to the property.

On the other hand, if you are only looking to improve the property for yourself and you will be living in it for the foreseeable future, you might not be worried about the financial return. If you are looking to turn a great property into your dream home with the right extension, then you can let your heart run wild.

How Much Does It Cost To Extend A Lease?

There are a number of factors that determine the cost of a lease extension. Whether it makes sense to do so will depend on the costs involved and what the buyer is hoping to achieve by purchasing a lease extension.

READ
How Has Covid-19 Impacted the London Property Market?

When the lease on a property expires, ownership automatically reverts back to the landowner. Purchasing a lease extension extends the length of the lease so that it expires at a later date.

Once the remaining term on the lease for a property drops below 80 years, the value of the property is adversely affected. Extending a lease prior to this can prevent a dip in the value of a property and extending the lease once the remaining term falls within this period can also be a wise investment.

Extending a lease can cost anything from around £7,000 upwards. There is a fixed £5,000 premium charge. On top of that, there are taxes, costs, and potential professional fees to factor in. These will usually equate to at least £2,000.

What is The Cost of Moving a House?

If your proposed extension won’t fit within the bounds of the property you own, you might be faced with a tough choice – abandoned your preferred designs, or move your entire property so you can fit the extension in.

The latter option can be very expensive, as you could probably guess. However, it is an option, and if you are serious about your extension, then it might be a move worth considering. Some properties lend themselves much better than the process to others. Some will need to be broken down and rebuilt.

In some cases, there might be a shortcut, such as moving one room from one end of the house to the other and then building the extension in its original spot.

How Much Does a Single-Storey Extension Cost?

As with the above scenario where you need to move a home, the costs of a single-story extension will vary according to a range of specifics. On average, you can expect to pay somewhere in the region of £1,000 for every square metre of your extension. This rises to £1,300 for properties in London. That meanest that a 5 x 5-metre extension would set you back by £25,000.

In addition to the cost of the raw materials, you will also need to account for the cost of hiring professionals. For example, you might need an architect to go over your plans and make sure that they conform to the relevant building regulations. As always, there are things that you can do to reduce your costs.

You can bring the cost of acquiring raw materials and shipping them in down by purchasing prefabricated structures or buy purchasing most or all of what you need from a single source.

How Much Does A Double Storey Extension Cost?

If you are looking at a double-storey extension, then the bad news is that you will have to pay more than you would for a single storey extension. The good news is that it won’t usually cost you twice as much as a single storey extension would. The prices for a double storey extension range from £1,500 to £2,600.

Again, London is more expensive by about £300, on average, taking the average price range for double story extensions up to £1,800 to £2,800.

READ
Getting Started with Property Investment

Work Out How Much Money You Have Available.

Before you give the go-ahead to any kind of renovations, you need to know exactly how much money you have to work with. Having to abandon renovations halfway through because the funds have run dry is a disaster at the best of times.

However, when you are dealing with something as dramatic as an extension, it can be even worse to have to break things off mid-flow.

Remember that your available assets go beyond what is in your bank account. Your total assets will include the property that you are considering renovating. If you renovate it the right way, then it should increase in value. However, a botched sub-standard renovation can have the opposite effect, especially if you leave it half-finished.

Work Out Your Outgoings Before You Commit

Once you know how much money you have on hand and what the total value of your available assets is, it is important that you don’t forget to work out what your expenditures are. You will need to keep paying your bills and covering your regular recurring costs during the renovations.

If there are any expenses you have that vary from month to month, then it is a good idea to err on the side of caution and assume that they will be on the higher side of what they usually are.

Whenever you are contemplating making a large or risky purchase, it is always advisable to work out how much money you can afford to lose, as in, have completely disappear from your accounts without getting anything in return. There may be cases where you can contemplate spending a higher amount because there is some kind of worthwhile return in it for you. However, if you were to remove that incentive, then it would no longer make sense to do.

It is much easier to add more to your extension later than it is to have to stop construction halfway through and wait until you have the necessary funds to continue. Don’t be afraid to restrain your ambitions a little bit for now so that you can be certain that the project is affordable.

A property extension can be a major undertaking, or it can be a relatively minor procedure. In either case, it pays to budget properly beforehand. Stick to the advice above and you should avoid any nasty surprises when it comes to the price of your property extension.

If you already have experience with extending a property and you have some budgeting tips to share, help other readers out by letting us know in the comments below. For example, if you have already added a double storey extension to a property of yours, how much did your two storey extension cost? How much did you pay to buy or extend your lease?

Share your experiences and help other people to budget more efficiently for their property extension.

Please use the following form to contact us

Fields marked with an * are required.
Send this to a friend