Although there is plenty of chatter in the Irish housing market of a slow down, few people are predicting any sort of crash or even significant downturns. Even some of the most pessimistic forecasts around state that properties in the region of €300,000 at the start of 2019 will go on to be valued at almost €370,000 or so by the end of 2021. What economists and housing sector experts are looking at is a growth rate which, though attractive compared to some parts of the world, will not be as spectacular as it has been in recent years in Ireland. But what does this all mean for a home extension?
Even in locations outside of Dublin, where property prices have been greatest on average, the cost of purchasing a home has not been matched by comparable rises in incomes. Of course, that doesn't matter very much if you secured your mortgage a few years back and have simply seen the value of your home rise with every passing quarter so that it is now worth much more than you paid for it. It is a problem, however, if you want to move and progress up the housing ladder. Obtaining the necessary finance to move from an average two-bedroom flat to a three-bedroom family home means a huge financial commitment for most people, these days. As such, many people are looking to a house extension as a cheaper alternative to moving.
The pertinent question is whether this form of upsizing will add a similar additional value to your overall property investment as you would get by moving to a larger house. There is no straightforward, one-word answer. It depends on your exact location and circumstances. However, these are the key factors you need to take into consideration when weighing up the financial benefits of a house extension.
If you move instead of extending to create that extra bedroom or living space you are after, then you don't need to pay legal fees for conveyancing. Nor do you need to hire a removals company. There again, you won't need to pay an estate agent a percentage of your selling price just for having marketed your home for you. You won't need to pay reconnection fees at the new address for utilities and you won't have to take time off work t oversee the move. Finally, you won't need to go the expense of increasing your mortgage to a much higher level as you would expect to do when moving up the property ladder.
Home extensions are much less costly than you might expect and even fairly large ones will not cost much more than €11,000. Smaller ones that come in at 15 to 20 square metres could be around half of this to build, feasibly. Therefore, you should remember that extension projects do tend to offer better value for money than moving does in today's property market.
Nevertheless, there is an important caveat to mention. If your extension is shoddily designed or built without the same degree of care as your original home, then it won't add much value. A good way to ensure your project does add real value to your home is to turn to experts to design it for you and then to ensure it is built to a high standard. This is what we at BIY do, of course. Remember that what might suit your needs may not suit the market. In the main, additional living space on the ground floor which, perhaps, makes for an open plan kitchen-diner is a good option which will add value. Adding en-suites, making your family bathroom larger and providing extra bedrooms is the best bet for two-storey extensions.
These are guides to what the market wants today, of course. There is no definitive right or wrong way to design an extension. That said, you should look at extended properties for sale in your area and check out those which demand the highest prices. They tend to be the ones that offer a lifestyle option that buyers find attractive while still being very practical.
Borrowing the necessary money to extend your home is often less costly overall than seeking a new mortgage to move home. However, there are pitfalls here, too. If the cost of your home extension is such that you choose not to remortgage on your current arrangement but do it by personal financing, then you could end up paying more. Avoid credit card financing unless you can pay off the debt within a set time period. The idea is to add value to your property and not get yourself into spiralling debt which is hard to get out of. Look at other financing options, such as personal bank loans instead.
Remember that you are likely to have to inform your current mortgage lender of any structural changes to your home that you intend making, anyway. You will have to look at the terms and conditions of your mortgage to find out. Finally, the best approach is to save as much as possible beforehand to keep your borrowing commitments as low as you can.
Because we take care of everything, from planning and design to construction and fit outs, BIY makes for a simple, one-stop shop for people looking to extend. This means that many of the costs you face when extending by going to different professionals – lawyers, builders, planning departments and architects – are handled in one, streamlined fashion.
Since we do it all day, every day, the savings we generate are passed onto customers meaning you can't really find a better alternative when it comes to Irish home extensions. Remember, too, that we design extensions for all sorts of reasons but that one of the primary aims is always to add as much value as possible to a home once it is complete with its new addition.