The economic forecast for 2014 in the UK seems to suggest that a financial recovery is well under way and that the housing market is recovering strongly in certain areas.
For many of us it still seems like a period of austerity rather than prosperity due to rising prices and wage freezes, which presents a conundrum if you need a bigger place to live in, do you extend or move?
The pros and cons of extending
Where you live and the current level of demand for your type of property are two factors that can have financial implications that will affect your decision to stay put and extend or move to a new home.
If you live in a densely populated area, like London or the suburbs in particular, then this part of the country has such a strong demand for housing stock and has specific hot spots that extending your property would probably be a cheaper option than buying another house.
Wherever you live in the country, the decision of whether to extend or move are often dictated by the size of the existing house and the plot that it sits on. Extending a family home so that you use up most of your garden space may sort out your space problem but you could make your house difficult to sell in the future if it loses the right sense of proportion and subsequently becomes un-attractive to buyers.
You need to get some estimates for all the intended work so that you can weigh up the estimated financial cost of extending and compare it against the cost of moving. The average cost of an extension should be somewhere between £1,000 and £1,700 per square metre. You should also get quotes from approved local plumbers, such as McNivens Plumbing for any drainage works that might be needed.
The pros and cons of moving
The costs associated with extending can be substantial and financing the project may be difficult if your capital is tied up in the property and lending restrictions come into play.
For some people the upheaval involved with having building work done is to wearing to contemplate and they would rather find a larger property to live in and sell their existing home.
If you took an example of a fairly typical three-bedroom detached family in the Home Counties that was worth about £300,000 and added a 300 square foot extension, that would cost in the region of £50-60,000 in building costs. Compare this with the typical price of a four-bedroom home which is in the region of £360,000 in the same area and you can see that in a straightforward comparison, the financial implications of moving could be considered cost-neutral compared to extending.
This very broad analysis can be applied to where you live in the UK with some regional variations but the ultimate answer to the question of whether it is better to extend or move depends on your own personal and financial circumstances.
The easiest way to add value to your existing property is arguably a loft-conversion, provided you have adequate space available. A typical conversion can cost around £20,000 and can add as much as £40,000 to the value of your home.
Only you can decide if it is better to move or extend in the end, but make sure you do all the sums and see if there is any financial advantage to either option before you make your final decision.
John Mason is a veteran in the housing market. He enjoys blogging about the tips and tricks to homeownership.