Home Improvements

The cost of extensions, conversions or improvements to your home, as distinguished from maintenance work, are treated rather differently, for they represent capital expenditure since they increase the value of the asset. Costs of extensions are high; during 2015 a fair average price for permanent brick-built extensions worked out at between £22 and £305 per square foot of floor area, depending on area and on whether the work involved alterations or installations of electric wiring and plumbing. To this must be added incidental costs such as those of obtaining planning permission, possibly of architect's fees and certainly the cost of having detailed drawings and specifications prepared in order to submit the application for local authority approval. Drawings will be needed for approval under the local authority's building regulations even though the extension may be a minor one not subject to full planning approval. Another possible expense might well be the charge that some local authorities will be making, from April 2001, for the consideration of planning proposals. When the improvement has been completed it is likely that the rateable value will be increased.

Wooden extensions or the erection of sun-rooms are much cheaper than traditional brick-built extensions, but it is an open question whether such additions to a house increase the value of the asset to any appreciable extent. A building society is unlikely to be willing to grant a further advance on a wooden extension, but finance over two or three years can usually be obtained, at a price, from a hire-purchase or finance company.


Variable Expenditure

As well as the fixed expenditure connected with property, there are many other calls on your budget associated with accommodation.

Maintenance

Whilst a short-term wasting asset, such as a car, depreciates in value by as much as 33% per annum (new car) or an average of 20% per annum (over four years old), freehold property does not depreciate in value if it is well built and well looked after. Nevertheless, it does require continual, if irregular, expenditure on it in repairs and maintenance.

It will need complete redecoration inside and out every few years, or its... see: Variable Expenditure


Refunds, Personal And Business Finance 2017

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