Extending your current home or buying a bigger one involves a mix of factors.

Deciding between extending your current house or selling it to buy a bigger one is a significant decision with many factors to consider. Here are some key points to think about:

1. Financial Considerations

- Cost of Extension vs. New Purchase:

- Extension: Calculate the cost of the extension, including construction, permits, design, and any temporary accommodations if needed.

- New Purchase: Consider the cost of selling your current home (agent fees, legal fees), buying a new one (stamp duty, moving costs, potential increase in mortgage), and any renovation costs for the new property.

- Return on Investment (ROI):

- Extension: Determine how much value the extension will add to your property. Not all improvements offer the same ROI, and in some cases, the cost might not be fully recouped in a sale.

- New Purchase: A new, larger home might already have the features you want, potentially offering a better ROI if property values in the new area increase.

- Financing:

- Extension: You may need to take out a loan or remortgage. Ensure you have a clear understanding of how this impacts your finances.

- New Purchase: A larger home may come with a larger mortgage. Ensure you’re comfortable with the increased monthly payments.

2. Lifestyle Considerations

- Location Preferences:

- Extension: If you love your current location, extending might be the better option. Consider proximity to work, schools, family, and amenities.

- New Purchase: Moving to a bigger house might mean relocating to a different neighborhood or town. Assess how this move will impact your daily life.

- Space Requirements:

- Extension: Assess whether an extension can provide the additional space you need (e.g., extra bedrooms, larger living area). Consider the impact on your garden or yard space.

- New Purchase: Buying a new house might provide the space you need immediately without the hassle of living through construction.

- Future Plans:

- Extension: Consider your long-term plans. If you intend to stay in the area for many years, an extension might be a sound investment.

- New Purchase: If your plans include significant life changes (e.g., career changes, retirement, family expansion), buying a new home might better suit your needs.

3. Emotional and Practical Considerations

- Disruption:

- Extension: Construction can be disruptive and stressful, especially if you plan to live in the home during the renovation.

- New Purchase: Moving is also disruptive but might be less stressful compared to living through a major construction project.

- Personal Attachment:

- Extension: If you’re emotionally attached to your home and neighborhood, extending might be preferable.

- New Purchase: If you’re ready for a change, moving might be exciting and refreshing.

- Market Conditions:

- Extension: If the housing market is slow, selling might take longer or result in a lower sale price, making extension a more attractive option.

- New Purchase: In a strong market, selling might be easier, and you could benefit from higher equity to put toward a new home.

4. Legal and Planning Considerations

- Planning Permission:

- Extension: Ensure you can get the necessary planning permission. Some areas have restrictions on the size or type of extensions.

- New Purchase: Ensure the new house doesn’t come with unexpected legal or planning issues (e.g., property boundary disputes, listed building restrictions).

- Building Regulations:

- Extension: Any extension must comply with building regulations, which might add to the complexity and cost.

- New Purchase: The new property should already meet current regulations, but always double-check.

5. Resale Value and Marketability

- Extension: Consider whether the extension will make your home more appealing to future buyers. Over-extending could lead to diminishing returns if your home becomes the largest or most expensive in the area.

- New Purchase: A bigger house in a desirable area might be easier to sell in the future, potentially offering a better long-term investment.

Conclusion:

Choosing between extending your current home and buying a bigger one involves a mix of financial, lifestyle, and emotional factors. Carefully weigh the pros and cons, consider your long-term plans, and perhaps consult with a financial advisor or property expert to make the best decision for your situation.

Author : Bass Tadros - is a mindset coach and a registered builder, boutique property developer.