The granny annexe could be a ‘good investment’ for your property

Phil Spencer shares importance home renovations in 2021

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What makes an annexe different to a garden room is they are designed to be lived in and often include cooking, toilet and washing facilities as well as a separate entrance away from the main home. Historically, a “granny annexe” has been used to keep elders, like parents and grandparents, close-by while also giving them independence. But in recent years, the annexe has had a rebirth and has become a practical, financial and emotional solution for a more adaptable breed of homeowners.

As working from home, or “hybrid working models”, continue for many of us, certain property features have become more popular – including the annexe.

In January 2021, the UK’s largest property portal Rightmove reported an 89 percent increase in the number of buyers and renters searching for the term “annex” or “annexe”.

Estate agents also reported an increase in demand from buyers and renters looking for outbuildings or annexes where people could have their own home offices.

Julian Horberry, Group Marketing Director at iHus, builders of bespoke annexe solutions, reported a similar trend where agents are either selling properties “quicker” that have space and/or planning for an annexe.

While it’s clear people are looking for additional space for home offices, what else can an annexe offer?

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“In terms of future-proofing, I think there’s a number of factors that an annexe ticks that people are starting to cotton onto,” Julian explained.

“Essentially, annexes are a good investment to make. It does add value to a property and increases desirability.

“We saw an upturn post-Covid where people recognised the value of family and the value of being together. If you look at countries around the world, they’ve always been close to their relatives in terms of living. But in the UK, it seems we’re all too keen to leave home, leave our parents and move on. But I think Covid was a trigger in all of that.”

As the cost of living continues to creep upwards as well as mortgage rates, an annexe could be the lifeline for either a first-time buyer who can’t afford to buy or an older person who’s struggling to get a mortgage.

“If you look at the cost of living and the cost of properties for both younger people trying to get on the property ladder and for older people who have got property and the equity is tied up in that property, from a financial point of view, and as the pressure increases on the economy, [annexes] just tick a lot of boxes. It makes complete sense,” Julian added.

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“The most immediate market is for the older generation looking at downsizing, moving in or moving next to their family.

“But on the flip side, you’ve got the younger generation who can’t get on the property ladder but also want to be away from their parents to a certain extent. It does and can work for that too.”

“If you look at it from the older angle… If mum’s got a £500,000 house she’s had for 30 years, rather than giving that to a care home as an ongoing rental, it makes sense to liquidate that equity and consolidate those funds into an annexe in the garden that mum then ends up having.

“An annexe is £100,000, she’s got a £500,000 home and then she’s got £400,000 from an equity release so it makes financial sense.”

There are other financial benefits too. An annexe is estimated to add as much as 20 to 30 percent to the value of a property, according to Checkatrade.

For those struggling to afford childcare, having an annexe built for their parents on a property could be a real lifeline. It could also save money in terms of fuel costs as long journeys are cut back in favour of a trip down the garden.

An annexe could also be “significantly” cheaper than a home to heat. A modern, smaller annexe is likely to be a lot cheaper to run than a large, Victorian building, for example.

But one of the most important factors for annexe owners is conserving a sense of independence for the person living in the annexe while keeping them close by.

Julian added: “Mum’s just around the corner – literally – but mum also has her independence and I think that’s important.

“What we see when you move parents into your home or even if you build an annexe on the side [of a property], it’s a little bit too close for comfort and there can be tensions and frictions.

“But an annexe is far enough away for there to be independence while also being in close distance.”

While an annexe can offer a financial solution, the emotional benefits may well outweigh the practical reasons.

An annexe can allow grandparents to have a relationship with their grandchildren while allowing their children to care for them as they get older.

“As an investment, it future-proofs the life of the older generation,” Julian said.

iHus has also seen annexes used for children who need care as they get older. Some families value the annexe for the child who is an adult but still needs ongoing, specialised care.

An annexe can be a great solution for those with an emotional attachment to a family home too.

If a family has lived and grown up in a home for more than 30 years or more, the last thing many people want to do is sell up and downsize.

Instead, some families choose for their children and grandchildren to move into the family home while parents move into an annexe on the property.

While annexes may have once solely been designed to house an elderly relative or couple, as the UK heads towards more economic uncertainty, multi-generational living and modern annexes could become more commonplace.

“I think as pressure builds, people are looking at ways to adapt and change as they look at their situation. We are seeing that change in lifestyle that the early adopters have picked up on,” Julian said.

“As pressure grows and finances continue to be stretched, then we become a very solid and rational solution.”

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