Houses For Sale with an Annexe

Buying a house with an annexe

Annexes are growing in popularity - and with good reason. They’re a flexible and cost-effective way to increase your living space and can save you money. Read on to find out what an annexe is, the benefits of buying a house with one and whether annexes are worth it.

What is an annexe?

An annexe is a self-contained living space on the grounds of a larger home. It includes a kitchen, bedroom, bathroom and usually a living room or area. Annexes can be attached to the main property or are sometimes housed in a converted outbuilding, such as a barn or garage. Annexes are different to extensions in that they operate independently from the main house. But what makes it an annexe rather than a separate home is that it’s still owned by the same household.

The benefits of having an annexe

There are many benefits to buying a property with an annexe - read on to find out more.

1. Brings multi-generational families together

Annexes are a great way to give young adult children more space while they save up to move out or buy their own place. Similarly, they provide a great living option for elderly relatives who may need more care or want to live closer to the family - this is where the term ‘granny annexe’ comes from. Buying a house with an annexe means multiple generations of the family can live together, but everyone can still have their independence.

2. Saves money for you and your family

The cost of later-in-life care and buying your first home in the UK can both be challenging. But generations of the same family, young and old, can live together independently for less with an annexe. Having one can provide the stop-gap your young adult children need to save for a bigger deposit, or reduce care home costs for elderly parents.

Buying a house with an annexe means you may also be able to reduce your Stamp Duty Land Tax (SDLT) bill. If your new home has an annexe, you can claim tax relief for buying multiple dwellings. This is calculated by:

1. Dividing the total amount paid for the properties by the number of dwellings (if you’re buying one property with an annexe, that’s two).

2. Work out the tax due on this figure.

3. Multiply this amount by the number of dwellings.

The minimum tax rate under the relief is 1% of the amount paid for the dwellings.

3. Provides a source of income

Bought a house with an annexe and want to boost your income? You can let it out - either temporarily or more permanently. It’s a great way to make the most of your additional space if a family member no longer needs it.

Someone renting your annexe will fall under the category of lodger rather than the traditional assured shorthold tenancy. But from a legal perspective, you’ll still be a landlord. You’ll be responsible for repairs to the annexe, the safety of gas and electrical appliances, and meeting fire regulations.

Does an annexe add value to your home?

Having an annexe increases the total square footage of a property, so it's likely to increase its value - that's before you consider the benefits and income potential above.

Exactly how much value an annexe adds depends on the size and quality of the build and current market conditions. Plus, an annexe could make a property more marketable and help it sell faster due to the unique opportunities it offers.

How easy is it to build an annexe?

Want to get the benefits of an annexe without buying a new home? Building an annexe in your garden is relatively straightforward. But you’ll need planning permission first, or a certificate from your Local Planning Authority. It’s worth getting your plans drawn up by a building professional before you apply. This way, you’ll be ready to tweak your design if needed to help your plans get approved quicker. Depending on the size of your garden and how much space you’ve got to work with, it might be better to attach an annexe to your main house, rather than build a standalone dwelling.

How much your annexe will cost and how long it’ll take to build will depend on your plans. It’s worth getting quotes from a few different builders to compare. Remember, the cheapest option isn't necessarily the best - you want to make sure you choose a reliable, experienced builder for a high-quality build.

Is an annexe worth it?

If you’re looking for some extra space with privacy, a potential new income stream, or want to save money for your multi-generational family, buying a home with an annexe could be the answer. Yes, you’re likely to pay more than you would for a property without an annexe, but you should be able to reap the benefits if and when you come to sell it yourself.

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