The growing cost of moving
With £457,072 as the average price of a property in London (the rise is at least 19% more than what was recorded in the previous year), the fact that people are expressing concern over the affordability of houses should not come as a surprise.
The high cost of moving is often a source of discouragement for homeowners who want to move to a larger property. This makes the option of staying and building extremely attractive.
The stamp duty and tax rates that were introduced in December 2014 have increased the burden of cost for a lot of top home movers. Stamp duty has a huge effect on homebuyers because it increases the cost of moving not just because of rising prices but the associated cost also affects them.
An average property in London is now close to the £500,000 barrier that allows Stamp Duty Land Tax rise from 3% to 4%, which adds not less than £5,000 to the cost of purchasing a new home.
Funny enough, London is responsible for about 42% of the total paid on residential properties between 2013 and 2014, despite the fact that it was just 15% of the purchased houses that were in London. What this statistic shows is that a disproportionally high proportion of the residents of London are affected by high rate of tax.
If you take a close look at the disparity in the cost of a three bedroom and a four bedroom house, and then compare it to the cost of converting or extending, then you’ll come to the likely conclusion that moving is not a better alternative.
For instance, in Richmond, an average four bedroom property now goes for about (£500,000) which is 82% higher than that of a three bedroom property.
It is 24% higher in Hammersmith and Fulham, which equates to £322,000. The fact that the average cost of a loft conversion is £53, 477, means that up sizing, (instead of converting your attic) can cost you triple that amount.
Although we can’t rule out the fact that a home owner might have other reasons for wanting to move to a larger property. In fact, a homeowner might want a bigger house for the extra bathrooms or a bigger garden.
The truth is that, apart from the fact that four bedroom houses are becoming increasingly more expensive, moving from a 3 to 4 bedroom property drives stamp duty tax into a higher band.
This results in moving costs rising as high as, £105,000, for example, in Hammersmith and Fulham.
According to our estimates, more than 500,000 homes across London have potential for conversion with an unexploited value of £70 billion, which provides a big avenue for homeowners to benefit from their attic space.
Desire for more space is one of the most common reasons for moving, and you can achieve this if you convert your attic thereby adding 20% more space to your property.
A loft conversion can create a lot of space for a home office, a student coming home from the university, a man cave, a hobby room, a pod room, and so on.
Considering the fact that an average London flat only has about 700 square feet of space, which is not much for a family, it is easy to understand the desire to upsize. A normal London terraced house is larger at 1,100 square feet and the average semi-detached has about 1,200.
For houses with potential for loft conversion, this can create 20% more living space, maybe even more than that with planning consent.
At Go Gondolier, we create bespoke loft conversions that will meet our client’s needs, we also help our clients experience a stress free loft conversion by managing the complex build. Contact us today for a free quote request