Should I stay or should I go? Three conundrums for homeowners

Buy a bigger house vs. build an extension

Thanks to the COVID crisis, many of us are working from home. That puts a lot of pressure on space, and when space is a premium – and if funds allow – you really only have two options. One, buy a bigger house or two, build an extension to your present home.

Let’s start with extending your current home. According to a survey by the TSB, two out of five people would rather extend than move. It’s easy to see why. As a homeowner you may be able to borrow funds against your house (i.e. by remortgaging) and you won’t have to pay the fees that are associated with moving.

As well as giving you more space, an extension could potentially increase the value of your home, especially if it’s well designed – say with a new kitchen-diner or extra bedroom. It’s not totally risk – or cost-free, however you may have to apply for planning permission and you will almost certainly need a building regulations check. There will also be fees for surveyors and architects, plus the cost of the work itself.

Moving house also has advantages: a fresh start in a new area or the chance to live in a more suitable property in your current neighbourhood is not to be sniffed at. Unlike having an extension, you don’t have to live on a building site for weeks. However, it also has costs you can’t avoid such as estate agent fees and conveyancing.

Both of these options have drawbacks and advantages, so work out your priorities – such as space, schools, area, facilities – before you decide.

Move to the country vs. stay in the city

As this news article ‘After Covid-19: are people really moving to the countryside and the coast?‘ shows, the Covid-19 pandemic has encouraged many people to think about moving from large cities (especially London) to places in the country, by the seaside or in the outer suburbs. With home-working a reality – certainly for now – homeowners may no longer have to commute daily, which means they can live further out and only come into the office two or three times a week. However, while there are plenty of advantages to this – more space to work, bigger gardens, cheaper housing – it might be too early to write off big cities.

Time for change

When your children leave home or if you’ve paid off your mortgage, you’ve got the perfect opportunity to work out your priorities.

For many empty-nesters, downsizing is an attractive option. Firstly, by selling your property and moving into a smaller one, you can free up equity which you can use to help your family, enhance your lifestyle or add to your retirement fund. Alternatively, if access to cash isn’t so important, you can sacrifice space to live in a more expensive area with better facilities and transport links.

However, as with any move, you will incur costs such as conveyancing, estate agent and surveyor’s fees, and possibly stamp duty. (The current stamp duty holiday is set to end on the 31^st March 2021)

If, on the other hand, you stay, you can free up money by choosing an equity-release loan, borrowing cash against your house, which will be paid back when you die or go into long-term care.

Want to explore all options? Charles Cameron’s experienced advisers will guide you through this process with the minimum of fuss.