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Move Or Improve Your House?
A dilemma faced by many homeowners these days is, do you spend money on moving house or improving your current home? Either option can be expensive if you get it wrong. An increasing number of people have more recently chosen to improve and extend because of uncertainty in the housing market and the perceived cost of moving. But the approach to improve can sometimes be the wrong one if the main aim is to increase the property’s value. Some improvements can have a negative effect on value especially if you embark on changes which are too extreme or out of keeping with the original style of the house or neighbourhood. Replace an entire kitchen and all you have is a kitchen. Yes it’s clean and new and perhaps more appealing to buyers but the £15,000 it may have cost will probably never be realised in the sale price.
In today’s housing market it’s best to view a house as a place to live rather than the investment opportunity it may have been in the past. It could be argued that this thinking extends to home improvements as well. Price up the cost of a new loft conversion and decide if it’s worth paying £10,000 - £20,000 for the extra space it’ll provide. If you are desperate for space then the answer could indeed be yes. Moving costs alone could add up to a similar amount and that’s before you find the extra to actually buy the new place. As a means to increase the value of your property, yes it’ll add value, but possibly not as much as it cost.
The best advice is to do your sums. Have similar properties in your area had similar work done to them and at what price have they sold? If you are intent on adding value in order to benefit though a sale, get the best possible price but make sure the job is done to a high standard. Obviously if you have been able to get hold of a property cheaply because it really does need work, then you’ll not gain much in a sale unless the work is carried out. It could be a good idea to look at the costs of buying a house where the work you’d like to do has already been done. Would you have to pay stamp duty? If not then the costs may not actually be that bad. You would need to get best price from a solicitor and removals company, but it could work out cheaper and be less disruptive in the long run.
Don’t lose sight of the fact that any one area will have its maximum value. Yes someone will inevitably push that value but in the main buyers will not pay much over the norm. If you push your expected property value beyond certain stamp duty thresholds many buyers will also squirm at the idea of paying at the next level. Double glassing, replacement kitchens, bathrooms, decorating, landscaping, security can all help to make a house more enjoyable to live in but will not necessarily make you a bundle when you sell. If your house becomes too pricy many may opt to buy a cheaper house like yours and do the improvements themselves, or pay the extra to live in a smarter area.