Move up and out - but stay put

Adding new rooms to your existing property will not only extend your living space, it will give you a return when you come to sell, says Christopher Browne
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Remember the Big Pool Idea when anyone with a large garden paced the lawn, checked out the shrubbery and drew little sketches on the kitchen-table as they sought to put theory into practice. It's the same every time we have a long, hot summer. Suddenly our thoughts turn to bathing in our own backyard.

Many of us go for the portable plastic or inflatable option as these can be neatly stashed in the autumn, spring and winter months. They also are much less costly. Because, enticing as it may seem, building a 15m to 25m swimming pool or even a plunge pool costs upwards of £20,000-£30,000 and needs astute planning as well as ongoing all-year maintenance.

More important - it also makes the house harder to sell. Surrey mortgage broker Nigel Temple says: "The pleasures of dipping in and out of a heated outdoor pool are obvious, but the investment value dips in the wrong direction. The running costs of filling, cleaning, heating and filtering are high and when you sell most buyers see it as an unnecessary extravagance."

One couple who considered the Big Pool Idea were Christopher and Carolyn Hawkins from Northwood, Middlesex, who have a 120-ft stretch of lawn and flower-beds at the back of their house. "When we moved in five years ago, it seemed an attractive prospect. But with two very young boys we realised it would be too dangerous," says Christopher. So the Hawkins put in a giant, child-friendly play-frame instead.

With high house prices and rising interest rates, many owners are staying put and adding rather than moving on to bigger and better things. The Hawkins, who paid £136,000 for their three-bedroom house five years ago, are now tacking a £40,000 conservatory/study/ living-room and parking area on to the side of their house.

They made the decision after Christopher, a partner in a firm of industrial cleaners, who often works from home, found their small third bedroom too cramped to cope with office files and equipment. When it's finished, the extension will prove both timely and cost-effective. For the Hawkins recently had the house surveyed and found its value will jump to £350,000 post-conservatory - or £214,000 more than they paid for it in 1999.

The secret is saleability. "It's the key factor when you build or add-on. Apart from the obvious benefits of comfort and extra space, adding an extra bedroom or conservatory is often a better option than a £4,000 or £5,000 moving bill, and it adds considerably to your home's selling power," says David Hollingworth, of broker London & Country Mortgages.

Surveys by Woolwich and Nationwide building society confirm the L&C view. Their research shows many loft conversion more than double in value at selling time - so a £30,000 one will add £60,000 or more to your property when you sell - while most new double garages, conservatories or kitchen extensions add one-and-a-half-times their value.

But it's important to keep up appearances, too, says Jeremy Leaf, housing spokesman for the Royal Institution of Chartered Surveyors. "The best extensions are those that blend in with your property as well as the design of the houses around you. And you wouldn't want to destroy the elegance of an Edwardian terrace with a zany-looking or top-heavy loft conversion," he says.

Leaf suggests you work out what your home lacks, and build accordingly. Two excellent examples, he says, would be adding a kitchen/diner to a 1930s house with a small scullery-type kitchen or building a conservatory at the back of a semi-detached house with a restricted reception area.

A garage at the end of a row of houses also scores highly, according to Leaf. "If you live at the end of a London row, a garage could add at least £20,000 to your house's value," he says. And adding a fourth bedroom in a streetful of conversions "means you'll get the same price as everyone else and won't be penalised when potential buyers realise your house has three bedrooms and the others have four," says Leaf.

Research by market analysts Datamonitor shows Britons' spending on extensions and improvements is rising 4.8 per cent a year - expected to reach an all-time high of £17.7bn in 2006 - as we use the equity on our properties, home loans and savings to improve our lot. In response, many UK lenders are offering competitive rates to do just that. The Hawkins, for instance, are funding their extension with a two-year, no-penalty tracker from the Alliance and Leicester at 0.1 below base rate.

So, for now, you may find it easier to stay put and extend rather than move. It'll certainly pay dividends when you really do have to sell up due to a changing job, school or family circumstance.