Nine things to consider when renovating or extending a home

Find out how to avoid common pitfalls when renovating or extending a home with Hiscox's top nine things to consider.
An extension to a home under construction
Photograph: Tracie Louise

Soaring interest rates and inflation have given many homeowners second thoughts about moving further up the property ladder.

But that doesn't mean your quest for extra space has to end. Instead, renovating or extending your current home is a great alternative to upsizing in this difficult climate.

With prices surging amid the COVID-19 pandemic, the number of homeowners upsizing has slid dramatically, research from Halifax shows.

The total fell by 35% year-on-year during the first six months of 2022. The largest fall, of 45%, was recorded in Greater London.

From loft conversions to new kitchens, you'll have plenty of options when renovating or extending an existing property.

But such work can prove costly and time-consuming, and there are several pitfalls that homeowners need to be aware of.

Can you afford to renovate or extend?

The past 12 months have proven a rocky period for the UK economy. Cost-of-living pressures, inflation and a slowing housing market have all taken their toll.

The annual rate of house price growth slowed from 7.2% in October to just 4.4% in November, according to Nationwide's tracker.

Meanwhile, inflation continues to run above 10%, significantly higher than the Bank of England's official 2% target.

What's more, the Bank's base rate now stands at 3.5%, its highest point in 14 years.

As households feel the crunch, Britons are starting to reign in their spending.

Retail footfall slumped 13.3% during November, the British Retail Consortium reported, with a cocktail of uncertainties tightening purse strings.

In the face of so many financial headwinds, it's important to think about whether you can realistically afford a property extension or renovation.

Spend plenty of time researching the costs and potential timeframes. And make sure they match your current budget.

Happy that your bank balance is in good shape? Here are our top nine things to consider before you get started.

1. Consider how you'd work best from home

Many employers have moved to a permanent hybrid-working model, with staff only asked to attend their workplace for part of the week.

Few workers now expect to be rigidly spending five days a week commuting.

According to an international EY survey, 80% of employees favour remote working for two or more days each week. And only 20% would feel reluctant about fully remote working.

In the UK, 78% of employers now offer hybrid-working arrangements, according to research from professional body the CIPD.

As flexible working becomes the norm, investing in the home to create a suitable environment is becoming increasingly popular.

There are lots of ways to do it, so spend some time thinking about what's right for you. For example:

  • garden rooms can provide a quiet working environment, just a few feet from the main house. While they can be expensive, they also add to the value of properties: according to Housebuilder and Developer, they could add 5% to the house's value, while other estimates suggest value added could be around 1.5x the cost of installation
  • loft conversions can provide useful office space, free from the distractions of children, pets or day-to-day home life
  • guest bedrooms can easily be converted into dedicated home offices

2. Stay alert to shortages of builders and materials

A shortage of builders has led to an increase in competition for work, pushing up prices.

Meanwhile, supply chain issues have pushed up the costs of materials.

According to the Federation of Master Builders (FMB), virtually all (98%) of its members saw material costs rise in the second quarter of 2022. 

Some 71% of small-scale builders were forced to delay jobs due to shortages.

Overall, 42% of FMB members also said they were struggling to recruit both bricklayers and carpenters.

The current strain is pushing many companies into tough decisions – and even insolvency. Construction firms made up a fifth of all insolvencies during the first half of 2022, official data indicates.

3. Invest time in finding the right builders

With such a scarcity of builders, some might be tempted to pick tradespeople that are available more quickly. But it may pay to be patient.

By thoroughly researching builders (either through online recommendation platforms or trusted recommendations within the industry), homeowners can save a lot of stress in the long run.

Concern over the quality of building work is apparent within the industry.

The FMB has previously revealed that 86% of its members want the government to introduce a mandatory licensing regime to push up standards.

So, cost and availability aren’t the only issues to focus on. The FMB has suggested the following ways to check if a builder is reliable:

  • testimonials and examples of past work
  • clear communications
  • track record of punctuality
  • flagging potential delays early
  • solid knowledge of building regulations

4. Choose work that will maximise the value of your home

The reasons for major home investments vary widely. They could involve an extension that creates more room, or a renovation that improves existing living space.

But just because the work costs a lot doesn’t mean it will add a similar amount to your property’s value.

For example, a side return extension is popular with many homeowners seeking to create larger communal areas, such as kitchens.

These can cost up to £65,000, according to Checkatrade, and take around four months to complete. At the same time, they will disrupt the living space of a home.

But according to Homebuilding & Renovating, such projects could add around 10% to the value of the property.

By comparison, a loft extension typically costs around £40,000, says Checkatrade, and takes between six and 10 weeks. The work is relatively unobtrusive and could potentially add around 20% in value to the property, according to Nationwide.

5. Don't skip a building survey

Planning on extending your home? You'll generally need a proper survey to get the ball rolling.

A measured survey can map out your project in advance, ensuring all the measurements and dimensions are carefully recorded.

It feeds into the architectural drawings for the extension. These outline the design of the project, while taking factors like building regulations into account.

Failing to get an accurate survey could lead to mistakes further down the line, or the use of incorrect measurements. And that might ultimately cost you both time and money.

6. Create an extension or renovation timeline

Property extensions and renovations are all about planning.

Drawing up a timeline of key dates will ensure everyone is on the same page – from your family to the building firm and any surveyors involved.

Talk to your builder about when certain landmarks are likely to be reached on the project. With an extension, these could include:

  • groundwork or foundation preparations
  • construction of external and internal walls
  • building of the roof structure
  • installation of doors and windows
  • plastering
  • electrical work and plumbing
  • snagging

Material and skills shortages, poor weather or hold-ups with planning permission could all delay construction work.

But with a detailed timeline in place, you'll at least know where things are up to.

7. Be prepared to live on a building site

Over the long run, an extension or renovation can help you achieve your dream home – and deliver plenty of additional space.

But in the short term? Things may be rather uncomfortable.

Depending on the scale of the project, parts of your home could resemble a building site for weeks or even months.

If it's a new kitchen, you might have to make do with reduced amenities for a while. On the other hand, an extension could leave your lawn as a muddy waste ground.

Prepare your family for the realities of building work and highlight the long-term gains that will offset any short-term pain.

Remove delicate items from the affected areas and seal off spaces wherever possible.

Finally, think about what you'd do if material problems or extreme weather caused hold-ups.

For example, could you stay with relatives or friends for a few weeks if things dragged on?

8. Remember the potential risks

Major property work can often come with considerable risks: work can overrun or the costs could spiral.

Should uncertainty over inflation and supply chain issues continue, it could make materials and labour difficult to plan for.

At the same time, unforeseen problems could arise, such as flooding, accidental damage or even a total collapse.

Other potential problems to consider include:

  • failing to comply with rules and regulations, such as planning conditions
  • overspending on elaborate or unnecessary features
  • creating delays by not ordering enough supplies
  • going with the cheapest builders rather than the most trustworthy
  • failing to consider energy-efficient measures, which could deliver savings in the long run

9. Consider protecting your home with insurance

Research by Hiscox shows that the cost of an average property claim in 2021 was £20,000 while building work was ongoing (based on 2021 property claims data).

While not every job will result in a claim, it would be prudent for homeowners planning major work to ensure they have some form of building work cover as part of their home insurance policy.

Hiscox home insurance
Hiscox home insurance includes cover for renovation and extension projects up to £75,000 as standard, protecting your existing home, materials and liabilities, and any new structure.

Law Society members save 12.5% on Hiscox home insurance.

To find out more, visit the Hiscox website or call 0800 840 2337 to get a quote (Monday to Friday, 9am to 5pm, closed on Saturdays, Sundays and bank holidays).

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