There comes a time in every homeowner’s life when the house starts to feel a little cramped, dated or unloved. Your kitchen has moved from cosy to claustrophobic, who gets to use the one bathroom is becoming a battleground, and working from home three days a week at the kitchen table is playing havoc with your back.
You need more space.
But rising house prices and escalating building costs are making getting a larger or more functional home challenging. This is why it’s more important than ever to have all the information before you decide to renovate or relocate.
The cost of moving house
When you move, you'll need to agree on a budget that covers upfront costs like Stamp Duty Land Tax (SDLT), estate agent fees, legal fees, property surveys, and removals.
The cost of renovating
When you spend money on a loft conversion or a kitchen extension, you normally end up adding value to your home. However, you can end up hitting the ‘property ceiling’. Every street has a maximum value that buyers are willing to pay. If the top-performing house on your road sold for £450,000, and your house is worth £400,000, spending £100,000 on a dream extension could mean losing money when you eventually decide to sell.
Renovate or relocate?
When deciding whether to renovate your current home or buy a new one, you need to decide how your future lifestyle will be set up.
You can change almost anything about a physical building, you can knock down walls, add new rooms, or convert your garage. What you can’t do is change the plot of land it sits on. If your main motivation to move is to get into a specific school catchment area or to cut hours off your weekly commute, no wrap-around extension will ever make you happy. Your only choice is to plant that For Sale sign.
The stress test
Both options can be stressful, but they’ll test you in different ways. Your job is to decide what sort of stress you’re better able to deal with.
Renovating means dust, structural changes, and making layout decisions with a builder standing over you.
Buying a new home is dictated by ‘the chain.’ You’re at the mercy of mortgage lenders, slow conveyancing solicitors, and the buyers and sellers above and below you. A single failed link can collapse the entire structure at any moment.
Your current mortgage arrangements
Your existing mortgage deal plays a huge role in this decision. If you’re locked into a low fixed rate, moving might mean losing that rate or paying a hefty early repayment charge (ERC) to break the deal.
While porting a mortgage to a new property is often possible, lenders will re-evaluate your affordability under their specific criteria. If you choose to renovate instead, you might look into further advances from your current lender or a second-charge mortgage to fund the building work without changing your current deal.
Getting the right help
When trying to weigh up your options, seeking professional advice is crucial. An architect or a structural surveyor can tell you if your renovation ideas are possible, while a local estate agent can give you a realistic idea of your home's current market value.
Equally, speaking to an L&C mortgage adviser can help you understand how much extra you can borrow against your current property versus what your purchasing power looks like if you move to a new one.
Benefits and risks of renovating
Adapting your current property allows you to stay exactly where you are, but it comes with distinct financial and logistical challenges.
The advantages
- You have full creative control to design a layout, kitchen, or office tailored specifically to how your family lives
- Money spent on building work can potentially increase its eventual resale value.
- You bypass the costs of moving, such as Stamp Duty, estate agent fees, and removal costs
- There is no need to change schools, change established commutes, or leave a neighbourhood you love
The disadvantages
- Coping with months of dust, noise, structural chaos, or the lack of a working kitchen or toilet can test even the calmest of households
- If you spend more on an extension than your street’s ‘property ceiling’ allows, you might never recover that cash when you sell
- Unforeseen structural complications, rising material prices, and unexpected builder costs mean renovations frequently go over budget
Benefits and risks of moving house
Starting fresh in a new home gives you a blank canvas, but the process of getting there relies heavily on external factors.
The advantages
- You can choose a different style of property, a larger garden, better parking, or a more desirable area
- Moving is the only way to solve location-based issues, such as getting into a specific school catchment area or cutting down a long commute
- You avoid the long-term mess, decision fatigue, and dust of a live building site, moving straight into a finished space
- Choosing a house that already has the exact bedrooms or kitchen you need removes the project management burden from your shoulders
The disadvantages
- Fees like Stamp Duty, legal costs, and survey fees can push the price up before you even buy furniture
- In the UK, you’re often dependent on a long chain of buyers and sellers. If one person's mortgage falls through, your entire move can collapse
- No matter how many viewings you do, you can’t ever really know what a new area, road, or set of neighbours will be like until you live there
