New Build vs Extension London 2026: Which Is Better for Your Home?
- LCCL Construction
- 13 hours ago
- 3 min read
One of the most common questions LCCL Construction receives from clients is whether to extend their existing property or demolish and build a new house entirely. Both approaches have compelling advantages depending on your specific situation — and the right answer depends on your plot, budget, timeline, planning situation and long-term goals. This guide sets out an honest comparison of both options to help you make the right decision.
New Build vs Extension London: The Key Differences
A new build vs house extension London adds space to your existing property — typically a new kitchen, bedroom or living space. A new build replaces the existing property entirely with a larger, purpose-designed new dwelling. The key differences are cost, timeline, planning requirements, VAT treatment, disruption and the scale of transformation each option delivers.
Cost Comparison: New Build vs Extension
House extension:
A single storey rear extension costs £35,000 to £75,000.
A wraparound extension costs £60,000 to £110,000.
A double storey extension costs £85,000 to £160,000.
See our full house extension cost guide.
New build: Construction costs £1,800 to £3,500 per square metre.
A 150 square metre new build typically costs £270,000 to £525,000 to construct.
See our full new build cost guide.
VAT — A Major Advantage for New Builds
This is one of the most significant financial differences between the two options. New build residential construction is zero-rated for VAT — no VAT is charged on construction costs. House extensions are subject to VAT at 20 per cent. For a £400,000 new build this means a £80,000 VAT saving compared with an equivalent renovation or extension project. This makes new builds considerably more cost-effective per square metre than extensions at scale.
Timeline Comparison: New Build vs Extension
House extension: 5 to 12 months from initial consultation to completion — significantly faster.
New build: 18 to 30 months from initial design to completion.
See our guide on how long a new build takes for a full breakdown of all stages.
Planning Permission: New Build vs Extension
House extension: Many single storey extensions can be built under permitted development without planning permission. See our house extension planning permission guide. New build: Planning permission is always required — no permitted development rights apply. See our new build planning permission guide.
Disruption: New Build vs Extension
House extension: You can often remain in your property throughout the extension — disruption is significant but manageable for most families. New build: If replacing an existing property you must vacate completely, find alternative accommodation and manage the demolition and rebuild process. This is a major practical consideration that many clients underestimate.
When Is a New Build the Better Choice?
A new build is the better choice when: the existing property is in poor structural condition and costly to repair, the plot is large enough to justify a significantly larger replacement dwelling, the VAT saving on a large construction project is financially compelling, you want a completely modern property designed from scratch to your specification, or you are developing a garden plot or infill site where no existing property stands.
When Is an Extension the Better Choice?
An extension is the better choice when: you want additional space quickly without the 18-30 month new build timeline, you want to remain in your property during works, the existing property has strong period character worth preserving, the budget is £40,000 to £200,000 rather than £300,000+, or permitted development means you can build without planning permission. See our complete guide to house extensions in London.
Frequently Asked Questions: New Build vs Extension
Is a new build cheaper than extending in London?
Not usually — a new build costs significantly more in absolute terms. However the zero-rated VAT treatment makes new builds more cost-effective per square metre at scale than extensions which are subject to 20 per cent VAT.
Can I stay in my house during a new build?
If replacing an existing property you must vacate completely. If building on a separate plot or garden you can remain in your existing property during construction.
To discuss whether a new build or extension is right for your property call LCCL Construction on 020 8037 7332 or get an instant quote online.
