To move or improve?

Home owners often reach a stage where they need more space and start to consider moving house. However, with the property market showing signs of slowing down, improving the size and making more use of our current homes through extensions or conversions are becoming more appealing. In some cases, moving will be the only realistic option – for example, if you have a growing family and want to move from an apartment to a house with a big garden. For many property owners however, the decision is less straightforward as there are many factors to weigh up. If you have outside space that could be used for a conservatory or extension, or a loft that could be converted into an extra bedroom or office, improving your house could be the better choice. In this blog we take a look at the factors you need to consider when deciding to move or improve:

Location 
A home is about much more than the property itself: it’s all about the feel of the community, your next-door neighbours, the children’s school and other local amenities. If you love your home’s location but are in need of more space, it will always be worthwhile to improve rather than move. This can be achieved through a bespoke conservatory or orangery and means you can stay in the area where you’re happy.

Financial factors 
When making a decision whether to move or improve, the first thing to consider is how much each option will cost. Extending and improving your current property is the more affordable option: if you need more space, a high-quality conservatory will be the most affordable option whilst a loft conversion will be slightly more expensive depending on the location, the size of the loft and the number and type of windows.

Increase the value of your home 
One of the best ways to increase the value of your house is to extend it. Conservatories and orangeries are great, affordable routes to take and can add significant value to your home. Alternatively, consider creating more room by opening up the inside space with bi-folding doors, a quick and relatively cheap improvement that will breathe new life into your home and provide a more open-plan feel.

 

Avoid the hidden costs of moving 
Stamp duty is one of the hidden costs involved in moving up the property ladder to a larger home and it can be confusing. Current stamp duty rates are such that you pay 0% for the first £125,000 of a property, 2% of any value between £125,001 and £250,000 and 5% on the value between £250,001 and £925,000. Above this value you pay 10% between £925,001 and £1.5m and 12% on anything over that threshold. On this basis, for a home costing £400,000 the stamp duty would be £10,000:

 
0% on the first £125,000 = £0
2% on £125,001 – £250,000 = £2,500
5% on £250,001 – £400,000 = £7,500
 
You also need to allow for legal fees, estate agents and house removal costs as well the unavoidable expenses of furnishing a new property. After taking all of these costs into account, a conservatory or orangery may appear a more affordable solution. 

Lack of external space
If  you don’t have sufficient external space then an extension to your home may not be an option. In this case, moving may be the best option to give you the size of home you are looking for; after all, it wouldn’t be appropriate to give up your garden space for an extension as this could actually devalue your home.

In the end, there is no definitive answer as to whether it’s better to move or improve and ultimately the decision will depend upon your individual circumstances and the option available to you in your current home. Additionally, unless you are in the fortunate position of being able to pay cash, your options for moving or improving will depend on your mortgage lender. Banks and building societies apply the same rules and tests for lending whether the loan is for a new property or for a home improvement project. In the current economic climate, it is often easier to obtain a loan for improvement as purchasing a house will incur additional costs that may impact on the amount available for your deposit.

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