Last updated on:
April 27, 2022
Despite the rising costs of building materials, many Brits remain determined to carry out improvements to their properties. With the rise of hybrid working and after spending the majority of their time at home during national lockdowns, many people have spent more time working out how to make their home work better for them.
The desire to increase the amount of space within existing homes has led more homeowners towards loft conversions and extensions, which can not only make a property a more pleasant place to live, but also has the potential to increase its value when you move.
If you’re considering upsizing or renovating your current property, it’s worth speaking to an online mortgage broker to discuss your options for funding your project.
In order to find where in the UK homeowners are making the most applications to extend their properties, we analysed the planning permission portals of more than 250 local authorities to see how many applications mentioned ‘extension’ over the course of 2021.
Which locations are most interested in extending their properties?
Homeowners in London and the South East are carrying out the highest number of extensions in the UK, with 15 of the top 20 extension hot spots to be found in the capital.
This trend may be driven by a buoyant housing market and above average salaries, with Zoopla data showing that the average sold price for the South East was £444,508 in the last twelve months.
At the other end of the rankings, Blaenau Gwent in Wales is the location which has submitted the fewest planning applications for extensions per property, with a total of one planning application per more than 590 properties.
This is more than double the rate of applications at the second lowest ranking area, Wigan in the north west.
The rankings reveal a true north-south divide across the UK, with northern towns and cities making up 17 of the bottom 20 locations having the fewest number of properties per planning application.
How can I finance home improvements?
When considering an extension, there are a number of options to finance home improvements. Homeowners can dip into savings pots or take out an unsecured loan, but another popular option is to remortgage their property to fund their project.
How do I use a remortgage to fund an extension?
If you are looking to finance an extension or loft conversion, remortgaging your property could allow you to borrow additional funds which are then repaid over the rest of your mortgage term.
For example, if you have £150,000 outstanding on your current mortgage and want to borrow an additional £40,000 for an extension or other home improvements, you could apply for a remortgage for the total amount of £190,000.
Can I remortgage for home improvements?
As with any remortgage, your eligibility depends on a number of factors, including your property, your existing mortgage loan, and your current financial situation, as well as the types of home improvements being carried out.
Provided the valuation of your house hasn’t significantly dropped since taking out your original mortgage, your LTV is at least 90%, and you have made all your prior repayments, you are likely to be considered for a remortgage.
Remember that you can only borrow against the current value of your house. Using the example above, if your existing mortgage is £150,000 and you want an additional £40,000 for building work, your new loan is worth £190,000.
If your house is worth £250,000, then the bank can be confident that it is making a safe investment. If your home is worth £200,000, your application may be declined because the investment is not as safe for the bank.
How much does an extension cost?
According to Homebuilding & Renovating, most extension projects cost around £1,350-£2,250/m² of new internal space, plus VAT at 20%.
This general cost varies between a more straightforward, box-shaped single storey extension, and more complex basement extensions, where costs start from around £3,000-4,000/m².
There are also additional costs to consider including architects fees, structural engineers, surveys, building regulation certificates, and planning permission.
Is an extension a good investment?
Any home improvement or extension is a bit of a gamble, and it can only be considered a solid investment if the value of your home increases by more than the costs to have the work done.
Before you have any work done, get an estate agent with a solid knowledge of your local area to value your home before the work, and what they think it will be worth after the project is complete.
How are extension costs changing?
Global supply chain challenges and inflation mean that an extension or loft conversion now costs considerably more than it did a few years ago.
According to the Department for Business, Energy & Industrial Strategy, the material price index for all building work increased by 20.2% in February 2022 compared with the same month last year.
These costs are impacting key component materials such as steel, timber and glass, and fluctuations in costs mean that prices often change week-on-week.
What do rising building costs mean for my extension?
Rising costs for extensions mean that homeowners are having to put more money aside to complete their project, whether it’s a loft conversion or single storey extension.
As costs fluctuate, the price of projects could easily increase midway through the project, so getting clarity on how long a quote is valid for as well as whether the agreed price is fixed or likely to move as costs change.
Homeowners also need to ensure they have an adequate contingency budget set aside to cover any unexpected costs.
Do I need planning permission for my extension?
Applying and securing planning permission for an extension to a property can add weeks or even months to a project.
Planning laws are complex and any errors could result in significant additional costs, so when exploring whether you need planning permission for your extension it is vital to take legal advice.
In some instances an extension to your house could be eligible for ‘permitted development rights’ which enable homeowners to undertake specific types of work to a property without applying for planning permission.
The criteria for whether you need planning permission for your extension depends on a variety of factors, including how close the new development is to public highways, the size and height of the extension, proximity to neighbours, and whether your property is in a protected area.
To work out the number of planning applications featuring an extension per property, we analysed planning application portal data for each of the 252 local authorities featured in this research.
For each LA, we counted each planning application received (or registered in some locations) mentioning the term ‘extension’ between 1 January 2021 and 31 December 2021.
We then compared these to the number of properties located in each local authority based on the most recent (2021) Council Tax stock of properties data:
For the purposes of this study only relevant properties were included in the property stock total for each local authority. Excluded property types include flats, maisonettes, annexes, caravans, houseboats, mobile homes and 'unknown' residences. Local authorities with less than 1,000 properties were also excluded from the research to avoid skewing.