Building Extensions in England has just got a little easier…

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Following the recent news that Temporary rules put in place to allow home owners to build single story Building Extensions in England, up to 8m (6m for terraced and semi detached houses) have now been made permanent, I thought it would be a good idea to explain what options you have to take advantage of it.

What is the news?

In essence, temporary rules for Building Extensions in England were put in place way back in 2013 to allow home owners to build single story extensions up to 8m out from their home without the need for a full planning application.

How can Mortgage Success help?

After having a quick look on google, many sources are suggesting it can cost around £1,000 per square metre (sqm). If we work on the assumption of building out by 4m and a width of 10m, that is 40 sqm which equates to around £40,000. Assuming you do not have £40,000 in the bank (who does?), this post explains some of your options we can help with.

Remortgage

You could remortgage your home for the extra amount you need. That would mean either switching to a new lender or taking out some additional borrowing with your current lender. There are pros and cons to this which are all dependent on the figures involved. If you have plenty of equity in your home (percentage wise), then you may be able to benefit from keeping your existing more on a good low rate and only paying a higher rate on the additional borrowing.

If you switch it all to a new lender, they will be basing the LTV on the property as it stands before the extension is built which means you are unlikely to be taking advantage of the increase in value for a year or so after it is complete.

Secured Loan

Secured loans tend to be quicker to arrange but also more expensive than a conventional Mortgage. By going down this route, your current mortgage should remain on a competitive rate and only the additional borrowing amount will be on a higher rate. It may even be possible to get a product with no Early Repayment Charges which means as soon as your extension is complete, you can potentially remortgage to a new lender and combine it all and at the same take advantage of the increased value of your home to potentially secure a better deal overall.

Which is the better option for a home extension?

It is impossible to answer with no information. There are 4 things we need to consider – Cost, Speed, Ease and your circumstances.

If the deciding factor is cost, then it will most likely be a mortgage. If you want the money quickly and/or easily then it will probably be a secured loan. If your circumstances are less than straight forward then again, it will probably be a secured loan.

Like anything, it will probably not be that straight forward as it will likely be cheapest, but not if they are going to want my inside leg measurement or quickest providing it is not going to cost me an arm and a leg. When this happens we normally need to go off and do some research.

When discussing options with customer, we usually try to get a few basic details before we give an idea of the overall rates and fees. If it looks like we can make it work and you want to get something more official or get the ball rolling, we would then usually make a start on completing a “factfind” and go off to do the research properly which can take a day or 2.

Considering Your Finance Options for Building Extensions in England?

As ever there is no obligation to proceed so get in touch, lets talk through what you want and we can see if we can make it work. Worst case scenario, it has cost you 10 minutes on the phone, best case scenario we help you get that extra space and/or a new kitchen.