First home, we want an extension.

[m2287]

OK so we bought our first house August 2011. It was a complete dive, and we have done it up, painted EVERYTHING, new kitchen, and new bathroom. The property is semi detached corner plot, 2 double bed, with 1 bathroom downstairs, a smallish kitchen, lounge is ok size, and a decent front and back garden (which we have extended into the old double drive), with drive for a car.

We got it for £135k, and a 10% deposit. we now have 120K left on the mortgage (fixed rate will be up in august so can remortgage without early repayment charges then).

We had an estate agent come and value the house the other day and he has valued it at 145k - 152k, obviously this would mean that when it comes to remortgage, I will be able to do so at an 85% LTV rate if the bank agrees with this valuation which i dont see as a problem from looking at other houses that have sold in the area recently.

I talked to the estate agent and enquired about what it would be worth with a two story extension, making the kitchen a large kitchen diner, 3 decent sized bedrooms upstairs and also an upstairs bathroom. The house im attached to has already done this so im sure planning wouldnt be a problem.

He said at a guess the work would cost 30k but isnt a builder so not too sure! And he has just sold a similar house for 190k.

If i went to the bank armed with this info and an official quote from a builder, bearing in mind I dont really have any other deposit to put towards it (maybe 2k at a push), would they be likely to remortgage me at a house value of 190k and basically giving me the 30k I need in order to do the work, or would I be laughed out of the room?!

I have no idea about these things so any help would be appreciated!

 

[developer]

Lots to consider there, but if the neighbours have done it, they would be a good place to start, if they had it done and could recommend the builder - re establishing costs for reference.

Personal recommendation is the best way forward, with almost anything building related.

 

[Charles Morgan]

Re getting a mortgage based on the estimated future value - don't get your hopes up!

 

[m2287]

Lots to consider there, but if the neighbours have done it, they would be a good place to start, if they had it done and could recommend the builder - re establishing costs for reference.

Personal recommendation is the best way forward, with almost anything building related.

They rent, it was done before they moved in, and ive never seen the landlord about, apparently he is a "strange" one! Although they have extended the front of their house also (single story), and I already have planning to extend the front of ours the same as theirs, its just not what we want, two kids are going to need two rooms really lol! The mrs dad is a driver for a big new-build company so he has some contacts who he is getting in touch with for us re the builder.

 

[Will]

I think in the past some people used 'bridging loans' and/or money released at certain stages of a build as it progresses.

Won't be simple at all but I guess you have nothing to lose by doing some enquiries

Could you possibly call upon any close friends/family who have sufficient funds on the understanding that once complete you can repay them by way of a remortgage if your lender agrees in pricipal to the numbers?

Another consideration is to see how much you can borrow - both wrt income multiples and LTV - I think to get a decent mortgage rate most lenders want the LTV quite a bit lower than 85-90% (although I appreciate the increase in value after the works might actually improve this!)

Good luck

 

[Spin_bowler]

I obviously know nothing about your plot, type of house, actual size of extension etc but £30K sounds very light for two stories. You could lose 10K refitting the kitchen. You may have to upgrade the boiler to cope with extra rooms etc as well.

 

[Deleted member 6183]

Stage payment loan is as close as you can get, search self-build mortgages and you might find a lender who will lend as if your home was self-build.

You'll either need your home to have increased in value since you bought (unlikely) or be in possession of own funds to to get the build established.

 

[m2287]

I obviously know nothing about your plot, type of house, actual size of extension etc but £30K sounds very light for two stories. You could lose 10K refitting the kitchen. You may have to upgrade the boiler to cope with extra rooms etc as well.

Size of extension would be 4.8*2.8 metres in total, kitchen isnt a problem, I fitted the one we have myself with a bit of help from a carpenter grandparent, and a good friend whos a plumber ! Also have a good mate whos an electrician so mates rates are readily available.

Its more the actual building work im worried about. Although the neighbours wall is already there so we would only need the rear and one side wall I believe - could be wrong! I have guessed here but work needed would be on a 4.8m*2.8m plot:

Foundations & concrete floor
Build rear wall
Build Side wall
knock down original rear wall
floor on first floor
false walls for bedrooms/bathroom upstairs
plastering on all the walls
move afew water pipes downstairs for kitchen sink
fit bathroom
three new windows for bedrooms and bathroom (double ones?)
Fit original kitchen window

Painting/flooring/carpets I can do myself


Good point on the boiler though, hadnt though of that!

 

[m2287]

Stage payment loan is as close as you can get, search self-build mortgages and you might find a lender who will lend as if your home was self-build.

You'll either need your home to have increased in value since you bought (unlikely) or be in possession of own funds to to get the build established.

Thanks, ill have a look. It has increased in value, had the choice of a really nice one (with a much smaller garden) two doors down for 142k, but we bought ours for 135k as a bit of a dive, done alot of work myself and with some family help, and had it valued at 145k-152k the other day.

 

[m2287]

From googling it seems the average two story extension costs from 1.2k - 2.2k per square metre including plumbing, electrics etc. this would mean based on 2k per metre, mine would come out at 26880

 

[Spin_bowler]

From googling it seems the average two story extension costs from 1.2k - 2.2k per square metre including plumbing, electrics etc. this would mean based on 2k per metre, mine would come out at 26880

Given it looks like you'd be doing a lot yourself then you might bring it in for £30K. We had a single story 8x5M one five years ago as well as a new front porch and didn't see any change out of £60K (at least that's when I stopped counting, it was probably worse, Mrs S_B doesn't understand the meaning of a budget). That included everything and we barely lifted a finger ourselves.

 

[StevenN]

Would it not be fair to say the type of construction has a bearing of cost.
I'm considering a similar project but only one story mainly just a kitchen extension rather than a conservatory.
From what I have read the finished result needs to be similar in design to the main house.
For ours the majority of the building is render on block.
Blocks are cheaper than facing bricks so would work out cheaper.
Also there's nothing stopping you recycling some of your old fixtures till you can afford to Change things. Kitchens are pricey and new designs are out every week.
Couple this with slow sales in the shops you could bide your time and find the perfect one when your ready.
Also wall & floor tiles can be bought keenly when you shop around.
Most internal fixtures seem to change with fashion but your extension is a long term investment.
Keep us posted how you get on

Steve

 

[artyman]

Whilst even if all goes well and the loan is approved, some fundamental questions, do you need the space, is taking an additional borrowing commitment advisable, and if planning to sell, can the 'profit' in the expected revised valuation be achieved. Think carefully would be my advice

 

[Frugal]

It's worth speaking to the local planning folks who will give you a steer on the policy and can give you information about the work done by your neighbours. The per square metre estimates are a guide but I wouldn't rely on them for the purpose of a loan. Even though it sounds like a straightforward side extension job, you may also want to speak with a few architects who may be prepared to do a fixed fee service although some charge a staged rate based on a fixed percentage of estimated build cost, eg 1st payment on completion of design, 2nd on planning permission and 3rd on detailed plans for the builder.

 

[davidjpowell]

I think you'll struggle on funding. I'd be surprised if there are many lending products out there which will do what you need at the moment.

Probably your first step.

 

[cl55 amg]

I can't see them figures adding up its unrealistic a 30K extention will add 40K+ to the value there are to many other factors to take into account.

 

[IanA2]

I'd be a bit wary of the valuation by the estate agents, they can vary wildly. Best bet is to get three agents to value and take an average. That said Banks/Building Societies tend to knock a fair percentage off the estate agent's valuation for lending purposes,so as others have said, with your current estimated equity you may have difficulty raising the cash. You may have better luck in the social lending sector.

 

[MicB]

I do not think you should regard your home as a financial instrument......do what you need for YOU.....but lenders will not want to dilute their % margin, at best, and if you can find someone prepared to entertain funding the project there will be stage payment costs involved.
Many property deals fail because appointed ''professional'' valuers are deliberately under valuing as a reaction to protect their Professional Indemnity following the banks aggressive litigious actions in a falling market.
£2k/sq.m. is not nearly enough for such a small extension.

If you are determined to proceed get family funding to get the job done and ''hope'' (having secured an undertaking in principle) to be able to remortgage once the job is done......much easier at that stage but you need to be certain of the numbers.

Good Luck

Mic

 

[davidjpowell]

I do not think you should regard your home as a financial instrument......do what you need for YOU.....but lenders will not want to dilute their % margin, at best, and if you can find someone prepared to entertain funding the project there will be stage payment costs involved.
Many property deals fail because appointed ''professional'' valuers are deliberately under valuing as a reaction to protect their Professional Indemnity following the banks aggressive litigious actions in a falling market.
£2k/sq.m. is not nearly enough for such a small extension.

If you are determined to proceed get family funding to get the job done and ''hope'' (having secured an undertaking in principle) to be able to remortgage once the job is done......much easier at that stage but you need to be certain of the numbers.

Good Luck

Mic

Sorry, but this really really winds me up.

Professional valuers are not typically down valuing to protect their PI. They are valuing in-line with the Red Book, and with particular reference to the lenders standard assumptions. If the assumptions are harsh - eg restricted selling period, then expect a low valuation

grr.

 

[wemorgan]

My experience of builders: They'll look at how much the building work will add to the property value and charge that as their fee - provided of course this at least meets their minimum profit margin.

As for how much a 2 story extension costs - with knowing little about your house, £30k sounds cheap. Double that would be my guestimate.