As the economic woes of the world fill our news screens it can all seem very far away, but the new decade has brought the economic crises much closer to home. Whilst the UK is not a member of the Euro-zone the UK banking industry is very much tied to the rest of Europe and the wider world economy. Mortgage lending is still a problem and as the banks tighten their purse strings further this isn’t likely to get much easier in the next few years.
As a direct consequence, the trend of people choosing to extend their homes rather than moving to a larger property continues to grow. A change is as good as a rest, they say, and when it comes to your home extending can be not only as good as a move it can be more cost effective and a lot less stressful. This article will take a brief look at the comparative costs of moving against extending your home taking the case of conservatory or orangery builds as specific examples.
The cost of moving obviously depends on the unique particularities of your current property and the new one you plan to buy. But it is possible to generalise and at least make a list of certain costs that are almost unavoidable.
Stamp Duty (As of 2011)
According to the government’s taxation website (www.hmrc.gov.uk), the rate of tax on home purchases, called as ‘Stamp Duty’ (SD), is zero on a purchase price of up to £125,000. But if the purchase price is between £125,000 and £250,000, SD rate is 1% (however, it is zero for the first time buyers).
The SD rate is 3% and 4% on a purchase price of over £250,000 to £500,000 and over £500,000 to £1 million respectively. If the purchase price exceeds £1 million, SD rate is 5% (even for the first-time buyers).
The system is designed to favour first-time buyers, but if you’re looking to change your current property that’s not much of a consolation. If you are looking to buy a property of just over £250,000 which is not an extravagant price in many parts of the UK then the percentage the government takes is pretty painful.
Then there are the estate agent’s fees which can be estimated at 1.5% and those of a solicitor at around £500. The lender can also charge a valuation fee of approximately 0.15%.
So, to buy a property for £251,000 the additional costs to the price of the property can be estimated at £12,171. And this might be among the most uncomfortable payments you will make for such a sum, because it will be accompanied by one of the most stressful changes you can make in your life. And this total does not include the removal costs and any self-storage you might need to arrange. Removal costs vary widely around the country, but for a 4-bedroom house you can expect to pay at least a £1000, and self-storage can cost anything from £40 a month for just a 5 square-metre space.
Extending instead of Moving
The cost of extending your home is also akin to how long is a piece of string, although there are certain price guidelines available on specialist conservatory building-firm websites.
In general, using cheaper materials will save on cost. Combining cheaper materials with more expensive ones can also save money but still hold onto the unique qualities of a bespoke design.
Avoiding planning permission will make things more affordable and speed up the build process. In 2008 the law around planning permission for extensions was changed to make straightforward, more modest projects easier to begin. By limiting the size of the extension and adhering to some reasonable constraints planning permission can now be avoided. In these cases, this means that unlike when you move home the money you invest in your property will be wholly spent on your property, instead of ending up in nameless government coffers or on professional fees.
A high-quality, traditional-style conservatory covering an area of over 30 square metres with a heating system built by a reputable and experienced building firm can cost around £45,000 if it is built with an aluminium roof and PVCu & aluminium composite frames. If hardwood was to be used as the main material then the price rises to around £75,000. For a smaller, more contemporary-style aluminium building covering an area of around 15 square metres, you could expect to pay around £35,000. This would include the build cost, ground works, plastering and electrics.
Orangeries are becoming increasingly popular and give a property a more unique and prestigious quality when compared to the more standardised design of a brochure conservatory. An orangery is more likely to be a bespoke design that is made to look like it belongs to your home. A small orangery built using quarried stone covering an area of 15 square metres would cost around £50,000, and includes solar control glass in both the roof and frames and the installation of under-floor heating.
Ultimately, the choice to move may well be one that is not so much a choice as a necessity. But if it is a matter of space and a desire to improve your lifestyle, then the choice to invest your money as a whole rather than spending a significant proportion of it on fees and tax makes extending your home with a conservatory or orangery a more attractive option.