Should I Move House or Make Home Improvements?
If your house no longer suits your needs you have two choices: renovate or move. Both of these options can cost a lot of money, so we discuss when you might consider them and how you can fund your decision.
The initial excitement of moving into a new home can quickly fade. After a while, your house can start to look tired, damaged, and old-fashioned, or simply become less fit-for-purpose.
A property that suits your immediate needs when you first move in may eventually become more limiting, prompting you to think about whether you should move or renovate. For example, if you are now working from home or are expecting another child, you may want a house with extra space for a bedroom or an office.
Sometimes moving house might seem the best option, but it is surprising how renovations can transform your existing home.
We look at what home improvements are possible and how they could add value to your property, comparing this to the pros and cons of moving house to help you decide on what the best option is for you.
Should I make home improvements?
Deciding whether to proceed with home improvements, especially big projects, is difficult. After all, they can be expensive, time-consuming, and disruptive, with the risk that you may move house in the future anyway. But there are some valid reasons why you might want to invest money into renovating your home.
- To make your house more personal and fully centred around your needs, allowing you to enjoy your home even more.
- To create more space in your home, or convert the space you already have, to accommodate any family changes.
- To make your home more energy-efficient.
- To update and modernise your home.
- Renovations will typically be cheaper than moving house.
- Improvements can add value to your property when you come to sell.
What home improvements could I make?
Although the term “home improvement” conjures up images of great, expensive projects that change the entire look of your property, it can also include fairly small tasks that add up to have a great impact on your house. Examples of these smaller renovations that can freshen up a tired-looking house and make it more visually appealing include:
- Repainting the walls and/or doors
- Clearing limescale
- Replacing sealant
- Installing taps
- Changing lighting
- Replacing tiles, cabinets, and worktops
Other, more major home improvements will be more expensive and cause significant disruption, but the temporary discomfort should be worth it in the long-term! Some bigger renovation projects you could consider include:
- Loft, cellar, or garage conversion
- Make living area open-plan; reconfigure the layout of the house
- New kitchen or bathroom
- Add an en-suite
- Replace doors and/or windows
- Replace flooring
- Double glazing
- More modern and energy-efficient heating system
- Garden work (e.g. add decking or a patio; convert the front garden into parking area)
What adds value to a house?
Whether you’re renovating your home to live in, or plan to sell in the near future, it is worth considering how the work will affect the value of your property.
Firstly, you should remember that renovations won’t automatically add value to a house, so spending £10,000 on home improvements won’t necessarily increase the property’s value by £10,000.
Ultimately, the amount that renovations can increase a property’s value will depend on the individual house, as well as local demand and what buyers want in the area. Many places will have a “ceiling price” which will be the maximum a house can realistically sell for in that area, no matter how many improvements you make, so this is certainly something to be aware of when renovating a property.
If you are interested in what property features are valued in your area and what could increase the value of your home the most, local estate agents may be able to give you some insight.
Renovations that create space often add the most value, but they also typically cost the most. As a result, you could end up spending more on the improvements than the amount they add to the value of your property.
There are lots of figures from numerous sources that highlight what adds most value to a house.
A recent study conducted by Halifax indicated that a loft conversion adds the most value, increasing the value of a home by approximately £11,020.
Some of the other top ten upgrades, with the approximate value they add in brackets, are:
- Bi-folding doors (£5,256)
- Garage conversion (£4,847)
- Renovated/restored period features (£4,731)
- Extension (£4,129)
- Under-floor heating (£3,961)
- Add or remove garage (£2,610)
- Stair/chair lift (£2,224)
Some other sources estimate that renovations can add even more value, but actual amounts will vary between properties.
Remember, not every “improvement” will add value to a property as they may not be to the taste of everybody. You might enjoy a hot pink bathroom or a 70s style kitchen, but these changes are likely to be too personal to increase the property’s value much, if at all. Of course, if you plan to live in the house in the long-term, this is less important, but if you are thinking of selling then renovations in more neutral colours are more likely to add more value.
Is it better to relocate or renovate?
Although you can make a lot of changes to your property, there are limits to what can be done. You can only add so much space to a property and, if you want a bigger garden or an extra bedroom, these could be near impossible to achieve.
For example, if a young couple moved into a 2-bedroom property, but they are now about to have their second child, they are likely to need more space than any renovations can add. In this situation, moving house is likely to be the only option and, more importantly, it would allow you to choose a house that best fits your new circumstances and gain a fresh start.
Similarly, renovations can’t remove space. So, if you’re rattling around in a big house after your children have left home, you may consider downsizing, especially if you’re getting less mobile as you grow older. Although renovations can make houses more accessible, moving to a smaller and more manageable property could end up being better value for money.
Renovations also can’t change the location of your property. So, if you need to relocate for your job or are unhappy with your current home’s location, then moving house may be your only real option.
However, this can work the other way. If you love the location of your house and it’s ideal for all your needs, it might be better to consider renovation as it could be difficult to find another property that’s in a similarly good location.
Ultimately, if renovations can’t solve your housing needs, relocation might be the option to take. But bear in mind that, unless you’re very lucky and find your perfect home, if you move house you may still need to redecorate or renovate to make your new property to your liking.
Whatever you do, it is important to take time to research your options and not rush any decision, as both relocation and renovation involve a lot of disruption and the costs for both can quickly build up.
What to consider when renovating
- Do you plan to stay in your house for the foreseeable future or will you want to move at some point? If there’s a chance you will move house soon, you may want to rethink any renovations or, alternatively, renovate with a view to increasing the value of your property ready for when you sell.
- Check if you need to get planning permission. Some projects will be allowed under “permitted development rights”, but you should check what the limits and conditions are.
- For larger home improvements, get a structural survey of your property to check for any limits or potential issues with the work.
- Don’t try to do major work yourself. You will need to enlist the skills of specialists, particularly for plumbing and electric works for example.
- Bear in mind the weeks, or even months, of disruption the work will cause. During the work, you may live in what is effectively a building site, with dust, workers coming and going, and without certain facilities. You might want to stay somewhere else while the work is completed.
- Check if your renovations will affect your home insurance policy, as a claim could be invalidated if you fail to tell your insurer about any relevant changes.
How can I fund home renovations?
Before starting any renovations, it will be useful to compare quotes from different tradespeople to find the best price for the work. This will help to make sure you’re not getting ripped off as well as ensuring you use a reputable firm.
Research what you want done before-hand and get an idea of a budget as this will help you to stay in control of your spending. Renovation costs can quickly snowball and build up, so it is best to know from the start exactly what work you want done and what your budget is.
If possible, you should try to use your own savings to fund home improvement projects, whether they’re enough to cover the full cost of the work or only part of it.
However, especially for more expensive renovation plans, you may not have the immediate funds to pay for them. In this situation, what funding for house renovations is available?
Credit cards may be a possible way to fund smaller, short-term renovation projects that you will be in a position to pay off before the interest starts racking up. If you have more expensive plans, alternative funding options may be more affordable and more suitable.
Unsecured personal loan
If you have a good credit score you may be eligible for a personal loan with competitive interest rates; just make sure you can afford the repayments.
Second charge mortgage
For larger and more expensive projects, you may consider using equity in your home to fund your home improvements. One way you could do this is by taking out a second charge mortgage, which is a loan secured against the equity you already own in your home.
This is a separate agreement to your current mortgage, and it can be with either your existing provider or a new provider.
If the home improvements are likely to increase the value of the house, mortgage lenders may view your application more favourably.
Before proceeding with this option, it is crucial to make sure you would be able to afford to repay this extra loan on top of your usual mortgage repayments, as you risk losing your home if you fail to keep up with the repayments.
If you are planning to remortgage soon, you could consider borrowing more money than the balance you have left to pay on your house to cover the cost of your home improvements. However, be aware that this form of secured borrowing would result in higher mortgage repayments than you otherwise would have had.
Remortgaging may only be a viable option if you are coming towards the end of your current deal. If you remortgage in the middle of your mortgage deal, you would have to take into account any early repayment fees which could make the total cost more expensive than other funding options.
This option is also more suited to those who have a substantial amount of equity in their home, as the lower the loan-to-value (LTV) on the mortgage, the better deal you will receive.
Read more about what to consider if you’re planning to remortgage.
Whether a second charge mortgage, remortgaging, or neither of these options are viable ways to fund your home improvements will depend on the interest rates and the time you have left on your current mortgage deal, the amount you’ve already paid, any fees the lenders may charge, and what new deals lenders can offer you.
Green Homes Grant
The Green Homes Grant is a new government scheme to help homeowners fund energy-efficient home improvements. Announced in the Summer Statement in July 2020, the Green Homes Grant will give homeowners vouchers worth up to £5,000 to pay for at least two-thirds of the cost of eco-friendly home improvements.
Eligible energy-saving installations include: heat pumps, solar thermal systems, insulation for floors, walls, and roofs, and double or triple glazing.
Lower-income households in receipt of certain benefits will be eligible to receive vouchers worth up to £10,000 to cover the full cost of any energy-efficiency improvements.
Further information on the scheme can be found on the government website.
What do I need to think about when moving house?
If you decide that moving house will better suit your needs than making home improvements, then you will need to think about selling your house and finding a new property.
Crucially, you will need to decide what to do about your mortgage, if applicable.
You could port your existing mortgage, which means you will transfer your current mortgage deal to the new property. You will still need to apply for this loan and, if the new property is more expensive, you may need to take out a new, separate mortgage alongside your current deal to cover this increase, which could have different interest rates.
Alternatively, if you are near the end of your current deal, you might consider remortgaging, either with your current lender or with a new lender. You can use mortgage calculators to get an estimate of how much you can borrow and what your repayments could be.
Whatever option you choose, you will need to prove to the lender that you can afford the repayments, especially if you are moving to a more expensive property.
Moving house, especially if you are looking to sell your property at the same time as searching for a new one, can be stressful. Make sure you do plenty of research to help the process run as smoothly as possible and so you are prepared for the fees and any potential challenges you may encounter.
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more