Will an annexe (granny flat) boost my home’s value?

Are you thinking about adding an annexe (also known as a granny flat) to your home? Many homeowners wonder if building one will make their property worth more money.

Let's explore everything you need to know about annexes - from what they are to whether they're a good investment for your home.

What is an annexe?

An annexe is a small living space that you build onto your existing home. People often call it a ‘granny flat’ because some families use it to house elderly parents. But annexes are useful for a number of different reasons!

An annexe usually has:

• Its own entrance
• A bedroom
• A bathroom
• A small kitchen area
• A living space

Think of it as a mini-home that sits next to your main house. You can build an annexe as an extension to your house, convert your garage, or even build a separate structure in your garden.

Many families today use annexes for:

• Elderly relatives who want to live close but still have independence
• Adult children saving up to buy their own home
• Teenagers who want more privacy
• Home offices
• Rental income from lodgers

How much value does an annexe add?

Adding an annexe to your property usually boosts your home's value by quite a lot.

Property experts say that a well-built annexe can add between 20% to 30% to your home's value. For the average UK home worth £270,000, that could mean an extra £54,000 to £81,000!

Why do annexes add so much value?

Because they offer:

1. Extra living space - More square footage means higher property value
2. Flexibility - Future buyers can use the space in various different ways
3. Rental potential - Owners could earn money by renting out the annexe
4. Multi-generational living - More families want to live with different generations under one roof

Estate agents say that homes with annexes are selling faster since the pandemic because more people now work from home and want extra space.

How much to build an annexe?

Building an annexe isn't cheap, but it can be worth the investment.

The cost to build an annexe usually ranges from:

• £20,000 to £30,000 for a basic conversion of an existing space (like a garage)
• £40,000 to £80,000 for a medium-sized annexe extension
• £80,000 to £120,000+ for a large, standalone annexe in your garden

What affects the price? 

These things make a big difference:

• The size of your annexe
• The quality of materials you use
• Where you live in the UK (London and the South East are most expensive)
• Whether you're converting an existing space or building from scratch
• How fancy the kitchen and bathroom are

Remember to budget for extras like:

• Architect fees
• Planning permission costs
• Building regulation fees
• Connecting water, electricity and drainage

It's smart to get at least three quotes from different builders before you decide.

Do I need permission to build an annexe?

Yes, you usually need permission to build an annexe. You will almost always need planning permission from your local council. This is because an annexe counts as a significant change to your property.

You need to apply for planning permission by:

1. Filling out forms with your local council
2. Providing detailed plans of what you want to build
3. Paying an application fee (usually around £200)
4. Waiting for approval (this can take 8-12 weeks)

Your annexe must follow these rules:

• It must be used by family members or as part of the main house
• It cannot be sold separately from the main house
• It should be smaller than your main home
• It must not reduce parking space or garden area too much

You'll also need Building Regulations approval to make sure your annexe is safe and energy efficient.

If you live in a listed building or a conservation area, there will be extra rules to follow.

Should I build an annexe?

Building an annexe could be a great idea, but it depends on your situation.

You should consider building an annexe if:

• You have family members who need to live with you but want their own space
• You need a home office or extra living space
• You want to increase your property value before selling
• You have enough garden space to build one without making your outdoor area too small
• You can afford the upfront building costs

You might want to think twice if:

• Your garden is already small
• You live in an area where planning permission is hard to get
• The cost of building would be more than the value it adds
• You plan to move house soon

Talk to a local estate agent before you start. They can tell you how much value an annexe might add to your specific home.

Final thoughts

An annexe can be a fantastic way to add value to your home while creating useful extra space. Most homeowners find that annexes do boost their property value significantly.

But remember - build an annexe that works for your needs first, rather than just focusing on adding value. A well-designed annexe that suits your lifestyle will be worth more in the long run.

If you're ready to explore adding an annexe to your home, start by talking to your local council about planning permission and meeting with a few builders to get quotes.