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House extensions growing in popularity

House extensions growing in popularity

Category: Mortgages

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In the past few years, extending living space has become increasingly popular among homeowners. It allows you to upgrade your home and get extra space for a growing family without needing to move, and in the long run, the money spent could be more than worth it.

Moving vs. extending

Many people contemplate moving home if they're after extra space, but sometimes this isn't always practical. House prices at the next step on the ladder could make things tricky, and then there's the possibility that you simply don't want to move – you like the location, the neighbours and the home itself, but you just need a bit of extra space. And what if you can't find anything else that meets your criteria?

In these scenarios, extending rather than moving could be the best course of action. It may take an initial lump sum investment, but it could work out cheaper than buying a more expensive property, and if you've got the funds there, you'll have the chance to build your home according to your exact needs.

How would you extend?

According to research from Sainsbury's Home Insurance, extensions to the rear and side of properties have been the most popular kind of residential extension over the past two years, with almost a third (31%) of people who have extended their homes having opted for this improvement. Conservatories are the second most popular residential extension (29%), followed by loft extensions (15%), garage conversions (11%) and the construction of an outbuilding, such as a garden room or home office (5%).

The findings are supported by feedback from builders, with 92% of those surveyed having completed a rear extension in the last 12 months, while 72% have carried out side extensions, 54% have extended loft space and 41% have made garage conversions. It seems that having more communal living space is the preferred reason for extending, with 84% of builders having extended the kitchen/dining area, while 61% worked on extensions for the purpose of additional bedrooms and 53% worked on projects for new bathrooms and home offices.

It can make a huge amount of difference, too. Of those homeowners who have undertaken home extensions recently, 25% have added between 11 and 20m2 of additional living space to their homes, while 23% have added 21-30m2 and 18% have added 31m2 or more. Just think of all that extra space! It could be put to exceptional use, and it could even have long-term financial benefits.

Long-term gain

It goes without saying, but extending your home will almost always add value to it – and if you do it well, you'll hopefully be left with a decent profit. Potentially, this means you could remortgage to a lower LTV – you'll have built up more equity by default, and a lower LTV typically means lower repayments. You won't have reduced your mortgage balance straight away, but if you can afford to, you may like to overpay by keeping your repayments at their previous level – this means you can decrease the amount of interest you pay and possibly even reduce your mortgage term, allowing you to pay it off sooner, so it really could lead to long-term gain!

Of course, you'll need to have a big enough savings pot to make the extension in the first place, but if you've amassed enough and don't fancy moving, it could be worth considering.

What next?

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