Should I extend, renovate or knock down and rebuild?
If the house is structurally sound and the layout mostly works, extending and renovating is usually cheaper and quicker. If it needs major structural work, a large extension and a full renovation, knocking down and rebuilding can cost a similar amount and gives a better, more efficient house, partly because a new dwelling is usually zero-rated for VAT while extensions are charged at 20%.
What are the main cost differences?
Extensions are typically £2,600 to £4,000 per square metre including VAT, and full renovations £1,000 to £2,800 per square metre. A replacement house is typically £2,100 to £3,700 per square metre with no VAT on qualifying work, plus demolition of around £15,000 to £35,000.
What else should I consider?
- You will need to live elsewhere for most of a year with a rebuild.
- Planning policy on replacement dwellings varies, especially in the green belt.
- A new house can meet current energy standards far more easily than an upgraded one.
- Older houses may contain asbestos, which must be surveyed before demolition.
Related projects
This guide is general information about building work in the UK, not legal or tax advice. Rules change, so check the current position for your property with the council, HMRC or a qualified adviser before relying on it.