Move or improve? That is the question
It's the question every homeowner grapples with when they realise they've outgrown their property -Â moveÂ orÂ improve?
And now a new study by MoneySuperMarket has revealed that nearly twice as many Brits believe extending their property is a better use of their money than moving to a bigger home.
The research was conducted to determine homeowners’ feelings on whether adding square footage to their existing property, or moving altogether, was more cost-effective.
A quarter (24%) said moving was simply not feasible in the current property market, while a third (34%) admitted to not knowing which choice would be better for their finances, meaning many could end up making the wrong decision.
According to Brits, the biggest factor behind not moving house is the lack of suitable properties in the market, with nearly two-fifths (39%) of people claiming this is a barrier to any potential move.
Additionally, 38 per cent believe the unaffordability of housing is preventing them from moving home, while nearly one in five (17%) feel the uncertainty surrounding Brexit and its potential impact on the housing market is an additional hurdle to purchasing a new home.
Of those who would prefer to move rather than extend, nearly half (48%) said the main motivation is to move to a new area, while a further 20 per cent claimed they would consider moving to get more space with a view to raising a family.
The research supports the recent news that the number of Londoners leaving the capital is at a 10-year high with 68 per cent of those surveyed stating their desire for a move away from their current location.
Regardless of which makes better financial sense, both extending and moving require significant investment.
The research looked into how Brits would fund this milestone event and nearly half (45%) stated they would use existing savings, a further 44 per cent would use a mortgage and seven per cent would be willing to borrow from family members.
Regionally, while the majority of the UK would prefer to rely on existing savings or mortgages, Londoners bucked the trend, with half (50%) stating that they would consider using credit cards to finance any potential extension or move.
The study also found that, despite the fact that building an extension has an effect on current and future insurance policies, nearly half (45%) of Brits would neglect to inform their home insurance provider if they were adding an extension.
This omission is more common among older householders, with two thirds (66%) of those aged over 55 claiming they would not tell their insurance provider, compared to 40 per cent of 25-34 year olds.
Graham Richardson, from the Household Team at Admiral, said: "Carrying out a renovation could affect your property’s rebuild cost, number of bedrooms or bathrooms, and these are factors that may influence your insurance premium.
“Some insurers might not offer cover for renovations, so it’s important to tell your insurer about building work so that the property remains adequately covered in the event of a claim.
"This information also helps insurers offer renewal based on the correct property details, giving you peace of mind that your policy is up-to-date and correct.”
Kevin Pratt, consumer affairs expert at MoneySuperMarket, added: “Choosing whether to stick or twist when you outgrow your property is a major life-stage decision.
"For many, ties to a particular area and a shortage of affordable properties in the locality mean extending their home is the preferred tactic. Others instinctively feel they need a fresh start in a larger house. What’s crucial is that people weigh up their options to ensure they get the best value for the money they spend.
“Those having work done to their home certainly have to consider the impact on their home insurance.
"You need to tell your insurer as soon as work begins, so they can determine whether the project will affect your premiums - if they think there’s an increased risk of damage from the building work or a danger that burglars might exploit the situation, your premiums would increase. And if you increase your square footage, that will also bump up what you pay.
“If you fail to tell your insurer, either because you don’t think it necessary or you don’t want to pay more for cover, you risk not having a claim paid if something goes wrong. So it’s always better to keep your insurer up to speed with what you’re doing
For more information visit MoneySuperMarket’s new “Extend or Move?” page to find out what the best choices are for homeowners.
You can also find out more information at https://www.moneysupermarket.com/home-insurance/extend-or-move/