A substantial number of British home owners believe that extending their property is a better use of their money than moving to a bigger one, a new poll has found.
Some 42% said that extending makes more financial sense while 24% believe that moving is simply not feasible in the current property market. However, 34% admitted to not knowing which choice would be better for their finances, meaning many could end up making the wrong decision.
The research from MoneySuperMarket also found that the biggest factor behind not moving house is the lack of suitable properties in the market with 39% claiming this is a barrier to any potential move.
Additionally, 38% believe the unaffordability of housing is preventing them from moving home, while 17% feel the uncertainty surrounding Brexit and its potential impact on the housing market is an additional hurdle to purchasing a new home.
Of those who would prefer to move rather than extend, some 48% said the main motivation is to move to a new area, while a further 20% claimed they would consider moving to get more space with a view to raising a family.
The research supports the recent news that the number of Londoners leaving the capital is at a 10 year high with 68% of those surveyed stating their desire for a move away from their current location.
Regardless of which makes better financial sense, both extending and moving require significant investment. The research looked into how Brits would fund this and 45% stated they would use existing savings, a further 44% would use a mortgage and 7% would be willing to borrow from family members.
Regionally, while the majority would prefer to rely on existing savings or mortgages, Londoners bucked the trend, with 50% stating that they would consider using credit cards to finance any potential extension or move.
The study also found that, despite the fact that building an extension has an effect on current and future insurance policies, 45% would neglect to inform their home insurance provider if they were adding an extension. This omission is more common among older householders, with 66% claiming they would not tell their insurance provider, compared to 40% of 25 to 34 year olds.
‘Carrying out a renovation could affect your property’s rebuild cost, number of bedrooms or bathrooms, and these are factors that may influence your insurance premium,’ said Graham Richardson, from the household team at insurers Admiral.
‘Some insurers might not offer cover for renovations, so it’s important to tell your insurer about building work so that the property remains adequately covered in the event of a claim. This information also helps insurers offer renewal based on the correct property details, giving you peace of mind that your policy is up to date and correct,’ he pointed out.
Kevin Pratt, consumer affairs expert at MoneySuperMarket, believes that choosing whether to stick or twist when you outgrow a property is a major decision. ‘For many, ties to a particular area and a shortage of affordable properties in the locality mean extending their home is the preferred tactic. Others instinctively feel they need a fresh start in a larger house. What’s crucial is that people weigh up their options to ensure they get the best value for the money they spend,’ he said.
‘Those having work done to their home certainly have to consider the impact on their home insurance. You need to tell your insurer as soon as work begins, so they can determine whether the project will affect your premiums and if they think there’s an increased risk of damage from the building work or a danger that burglars might exploit the situation, your premiums would increase. And if you increase your square footage, that will also bump up what you pay,’ he explained.
