Is it cheaper to build a new house or to extend onto an existing house?

Question

I'm thinking in terms of square metreage. Someone has told me it is more expensive to extend because you have to 'tie in' the extension to the existing part of the house. Whereas I assumed that the extra walls and roofing materials that you wouldn't need on an extension (due to part of it being stuck on to the side of an existing structure) would more than bring the cost down.

Answer 1

It depends on a lot of factors but here is one that most people don't consider:

When you completely tear down a house and build a new one, the house's value will be reassessed for tax purposes. This means you will have to pay property taxes on that higher value. Not so when you just do an addition. The raise in property taxes will far out weigh any money you save by starting from scratch. The addition strategy will save you much more money.

Answer 2

With a new build half of your money is buried under the ground and the shell above is the easy part. An extension if done correctly will add to the value of your property only if others in your street cul-de-sac have done the same. There's no point in building a £500,000 house in a £250,000 road.