adding to mortgage borrowing for home renovations

[Blown2CV]

we've been in a bit of financial limbo in recent years due to my wife starting a new career, and me being freelance and my industry being quite volatile.

We've had a fair number of items we want to do to our house to finish it off a bit. We've already spent a fair amount on it over the 5 years we've been here. It's a barn conversion which was originally converted back in the 90s and just needed quite a few things doing to modernise the old modernisation if that makes sense.

We're renewing mortgage in Nov and whilst it looks like it's going up a fair chunk, we're trying to work out whether it would make sense to add to the borrowing in order to finish off the things we want to do to the place. It might be say £70k or something if we did everything on the list.

We're at about 50% LTV or something. I'm 48, she's 42.

We're fairly sure we're staying here for a few more years yet, but this isn't dead set.

Keen to know thoughts please.

[dirky dirk]

I’d sit on my hands

[greygoose]

If you can afford the payments then possibly yes, if you can’t then a firm no.

[SDarks]

Having looked into doing some improvement works and getting a fair few builders’ quotes recently, the maths simply doesn’t add up. The cost of the works just doesn’t translate into a corresponding increase in the value of the house, with VAT being one of the biggest factors.

I’m sure plenty of people considering extensions and other major works are reaching the same conclusion. It makes me wonder where that leaves the trades who seem to be booked up for months in advance. Perhaps some people are happy to absorb the cost for the lifestyle benefits, but if you’re planning to move in a few years and the property isn’t your forever home, it’s a pretty difficult pill to swallow.

At some point, you have to ask whether it makes more sense to spend the money on a house that already has what you want, rather than spending a fortune trying to create it yourself.

[Blown2CV]

fair enough. We weren't aiming to sort of make a profit on the renovations. It was more a case of we just have all these things hanging around unfinished such as one bathroom half ripped out and some rooms quite shabby still but can't be finished until something else happens due to dependencies and so on. It's been quite frustrating as we thought it would all be done years ago really, so it's more a sort of closure and enjoyment point rather than spend 50k to make 100k back in value. The house has increased a fair bit since we bought in 2021 anyway but I don't think the market permits people putting a new bathroom in and making 3x the spend back anymore.

[ClaphamGT3]

SDarks said:

Having looked into doing some improvement works and getting a fair few builders quotes recently, the maths simply doesn t add up. The cost of the works just doesn t translate into a corresponding increase in the value of the house, with VAT being one of the biggest factors.

I m sure plenty of people considering extensions and other major works are reaching the same conclusion. It makes me wonder where that leaves the trades who seem to be booked up for months in advance. Perhaps some people are happy to absorb the cost for the lifestyle benefits, but if you re planning to move in a few years and the property isn t your forever home, it s a pretty difficult pill to swallow.

At some point, you have to ask whether it makes more sense to spend the money on a house that already has what you want, rather than spending a fortune trying to create it yourself.

It will be quite dependent on the works and the property market in your part of the country. As a very broad rule of thumb, anything that adds to the number of bedrooms or to the floor area of the property is more likely to stack up than a refresh of an existing footprint

[okgo]

With things like this, I’m of the opinion of get it done, and live in the result for longer.

I didn’t add to borrowing but did deplete cash savings to do bathrooms and windows/carpet/painting etc in my current house within months of buying it.

If it needed something else doing and I couldn’t afford it up front I’d add it to the borrowing. 70k isn’t going to change a monthly much.

[alscar]

I suppose asking what the potential £70k additional is as a percentage of the current mortgage is my obvious thought and equally will the new rate of interest be doable currently on both the mortgage and the additional borrowing ?
Assuming it is doable then personally I would.
Whilst you may not make all of it back should you move equally it won’t all be dead money and you get to enjoy a finished home which is “ priceless “ !

[Sheepshanks]

Blown2CV said:

It's a barn conversion which was originally converted back in the 90s and just needed quite a few things doing to modernise the old modernisation if that makes sense.

If it's been little touched for ~30yrs then it could be a very difficult sell - OTOH, at least around us (semi rural West Cheshire), houses that have been "flash" refurbed get listed for what seem like bonkers prices only to sell quickly.

[Blown2CV]

Sheepshanks said:

Blown2CV said:

It's a barn conversion which was originally converted back in the 90s and just needed quite a few things doing to modernise the old modernisation if that makes sense.

If it's been little touched for ~30yrs then it could be a very difficult sell - OTOH, at least around us (semi rural West Cheshire), houses that have been "flash" refurbed get listed for what seem like bonkers prices only to sell quickly.

it isn't one of those, but there have been some elements that we've had to upgrade a bit.

[omniflow]

Adding money to the mortgage is almost certainly the cheapest as far as interest rates are concerned, but if that means you pay it back over 25 years it could cost more overall.

Some people will tell you to do it, others, of a more cautious nature, will tell you not to.

t's your life and it's your home.

What do you actually WANT to do?

Are you Mr "Super Cautious", or do you prefer to grab life by both horns and enjoy it (probably some mixed metaphors there).

I know exactly what I would do, which is exactly what I've done in the past. Get hold of the money that you can afford to pay back and make your home as nice as you can / want it to do. Do it now, rather than in 20 years time, that way you've got an extra 20 years to enjoy it.

[SoliD]

okgo said:

With things like this, I m of the opinion of get it done, and live in the result for longer.

I didn t add to borrowing but did deplete cash savings to do bathrooms and windows/carpet/painting etc in my current house within months of buying it.

If it needed something else doing and I couldn t afford it up front I d add it to the borrowing. 70k isn t going to change a monthly much.

I'm of this opinion, waited for a while in this house to get some bits done and they were stupid things like getting our driveway done and expanding it as well as sorting out the back garden and wished I'd spent the money and got them done sooner as we could afford them but I ummed and arghed about borrowing the money.

[TheK1981]

Just go for it, a few times ive held back being 'sensible' when I should have gone for it, I bought a 3 bed semi for £210 as the 3 bed detached was £235 and I played safe, mine is now roughly £325, detached £400 and out of reach now, im lucky I have quiet neighbours but they are recently married and want kids....

In 5 years time you wont notice the cost but will have had 5 years of a sorted place (obviously if depends how big that 70 is as a %)

[gangzoom]

ClaphamGT3 said:

It will be quite dependent on the works and the property market in your part of the country. As a very broad rule of thumb, anything that adds to the number of bedrooms or to the floor area of the property is more likely to stack up than a refresh of an existing footprint

We did a total renovation/rebuilt, didn't add any more room, infact reduced the square footage and removed one bathroom.

The work was mainly focused getting more light into the bungalow, maximizing views and making the space work for us. The first time I realised just how well the architect had hit their brief was when first fix was underway. The dark part of the corridor was essentially how the whole bungalow felt previously, the difference adding more glazing and design was pretty dramatic.

Adding value to the property was not the priority, instead making our home some where that felt special was the aim. I blame watching reruns of Kevin McLeod when nursing hangovers at uni for the lack of focus on momentary value of the house. As Kevin loves quoting.......just ignore the cost.

A great building is one that truly enhances the lives of the people who use it.

In reply to the OP we funded 50% of our renovation through additional borrowing. As others have suggested, absolutely zero regrets from our end, the cost is essentially a distant memory, coming home every day to a space filled with light rather than a dark lair is priceless

Also don't wait, we delayed the start of our build by about 12 months partly because the common thought at the time(on here and other sources) was building costs would drop. It didn't and hasn't, the delay added 10% to the cost of the project, looking at how busy our builder remains I highly doubt building costs will get cheaper any time soon.

Edited by gangzoom on Monday 24th August 18:35

[Blown2CV]

i think that could be good example being relatively sure that the spend was an investment with a suitable payback. My spend might end up increasing value somewhat, but not by the amount of the spend, so it's really mainly about the enjoyment and spreading the impact a bit.