We often hear about a housing crisis throughout the country with 1st time buyers unable to get on the property ladder. The government will need to come up with some big solutions to kick start new home building to reach & exceed current targets. An issue less talked about is the housing crisis that exists for those already on the property ladder.
For further information, please refer to this vlog created by our Managing Director, Greg Wilkes
What crisis you may ask? They own a home, what’s the problem.
Many growing families are simply running out of room. They may need an extra bedroom, bathroom, playroom or bigger kitchen to accommodate the kids.
The problem many have in London is that house prices have increased so dramatically since 2009, that often families just cannot afford to upgrade to a larger home in the same area.
The cost of moving to a larger home can be out of reach for many.
The website http://www.home.co.uk analyses the average cost difference for areas by the amount of bedrooms it has. Let’s take an example from the valuations there to see how much it would cost upgrading a 3 bed house to a 4 bed.
Area analysed- Ealing, London
Average cost of 3 bed home £901,143
Average cost of 4 bed home £1,177,014
This is a price difference of £276,000 between a 3 & 4 bedroom property. That’s a lot of money to find if your family is growing & you need more space.
Don’t forget to add on top of this figure-
Stamp duty (£61,450) legal fees (£5885) & moving costs (£5000)
You now have a total cost of £348,335 to upgrade from a 3 bedroom to 4 bedroom property in Ealing London.
The figures are even greater the closer to London you get.
So no wonder growing families are screaming “Help – I have no space & cannot afford to move!”
There may be the option to move to a cheaper area to afford a larger house. But when friends and possibly family are nearby & the kids are settled in school many would rather stay where they are.
So what can be done? Is there a cheaper solution?
Well what about creating the extra space yourself within your own home. Adding a loft conversion or extension can really give you significant extra floor space.
Some converted lofts can provide an extra 2x bedrooms & a bathroom if the loft is large enough & designed efficiently.
Not only that, the added value the extension or loft puts on your home often far outstrips the initial investment. So you get the benefit of increasing the value of your home significantly & enjoying the extra space.
The average loft conversion or extension can cost between £40,000- £65,000.
Currently an interest only mortgage for £65,000 at 2% interest is only £108 per month
With borrowing rates at record lows, could this be a time to consider investing in your home to add some extra space?