The Complete Guide to Granny Annexes

The granny annexe is becoming a hugely popular way to care for elderly parents as they age. In this guide, we’ll answer all your questions about Granny Annexes. What options you have, the benefits, the costs and the legalities. Keeping your elderly parents independent and safe with a Granny Annexe can be the solution to many of the problems you might be facing as your parents’ age.

Chapter 1: What is a Granny Annexe?

A Granny Annexe is an umbrella term for a number of different housing arrangements that allow an elderly relative to live in your house with greater independence. The most common layout of a Granny Annexe is one that is attached to a residential property with its own kitchen and bathroom.

What types of Granny Annexe are there?

Traditional Granny Annexe

With a traditional Granny Annexe, a portion of the main house is sectioned off from the rest. Within this portion of the house, a self-contained living area which includes a kitchen and bathroom will be present. They might have separate entrances or share the main entrance but they are usually attached to the building and on the ground floor.

Granny Flats

A variation of the traditional granny Annexe is a granny flat. Common in more built-up city areas, one floor of the building may be dedicated to being a self-contained flat rather than an extension connected to the house.

Ancillary Buildings

This category of annexe can be self-built or pre-built offsite. The idea is that you build a permanent or semi-permanent mobile home in your garden. The building should be connected to the utilities of the main house making it ancillary. There are also many great examples of outhouses being converted for use by an older person.

What are the benefits of a granny annexe over remaining at home?

An intergenerational living arrangement can offer a lot of social and practical benefits for all parties. While they’re not without disadvantages we think the following are the three core advantages.

More time with your loved one

Making time to visit or take an elderly parent out can be a challenge with already busy lives. By moving them nearer it becomes much easier to spend time with them, whether it’s inviting them round for dinner or just chatting in the garden.

Financially Sensible

If your loved one has savings greater than £23,250 then generally won’t qualify for council support paying for care. In these situations, creative solutions such as downsizing to an annexe in or adjacent to a child’s house may be a solution. Proceeds from the sale of an existing house can be used to fund care costs. It also makes it much easier for families to take on additional care duties to reduce reliance on professional carers.

Greater independence than care homes

When you have control of your loved ones living arrangements it’s much easier to make it feel like home for them and give them a much greater sense of independence than moving into a care home ever could.

What are the downsides of a granny annexe over remaining at home?

Reduced Independence

While a granny annexe can offer greater independence than a care home, it can be demoralising for a parent to move into the garden of a child’s house and it might not be suitable for them.

Boundaries and tensions of living nearby

Being close to your family can be great, but if you don’t set boundaries for when you both expect to see each other it may cause friction. It’s also possible for differences to be amplified when living close together. It will probably be fine if this is discussed beforehand.

Tricky money conversations

Whether it’s billing your parents for utility usage or renumerating siblings that take on caring responsibilities it can be a minefield of hurt feelings if not managed properly. Make sure you think about the details and discuss this with everyone involved before rushing into a situation. All of your siblings want what is best for your parent so there is plenty of common ground to work with, you just need to hammer out the details.

How do the finances work?

Let’s take a scenario where a widowed mother with dementia is needing increased care in her home, it’s got to the point where she’s not safe alone in the house. She lives in a £250,000 house, has £40,000 in savings and is able to cover her living expenses with income from her state and private pensions.

There are three options:

1. Stay put and use up savings paying for live-in care.
2. Move into a care home and sell the house.
3. Sell the house and move into Granny Annexe in their child’s garden

Option 1:

We know that live-in care will cost approximately £770/week or £40,040/year. In this scenario, savings will burn down to £23,250 in just under 6 months. This is important because it means that the council will now cover some of the costs of looking after her. It does, however, mean that they may suggest a care home over home care if they feel that will be more financially sensible. If they do suggest this you have a choice between being forced into a care home or releasing equity from the house to continue to fund care at home.

Option 2:

The cost of residential care varies wildly across the UK, given we’ve suggested a house value of £250,000 we’ll assume that this is the south-east of England where costs (according to which) would be around £760/week or £39,520/year. In this scenario, you’ll have access to proceeds from the house sale and income from pensions. You could expect to get 7-10 years of runway. This can be a cost-effective solution but costs will rise if nursing care is required in the future which may reduce your runway.

Option 3:

In our third option, we’ll move our loved one into a granny annexe. The benefits of this are that most of the house equity becomes available to be spent on care. We can subtract £60,000 for the building of the annexe although children might want to chip in or pay for it themselves since it will increase the value of the house. Assuming full-time care from a live-in carer it would still result in five and a half years of care before relying on the council.

The other benefit of living in an annexe is that children can help contribute to the care and may be able to reduce live-in care by one week a month. If this was done it could save £9,240/yr and extend your runway to around 7 years.

Chapter 2: Build or buy, what’s right for me?

When it comes to getting your own Granny Annexe you have a number of options to choose from:

What should you be asking when considering a Granny Annexe?

Looking after a parent in your own home throws up a number of issues that you should consider before jumping into this. Here are some things to consider when trying to decide what your best options are.

1. What Care Requirements do you have? – If you are looking after your loved one, how much help do they need? If you require a live-in carer then a second bedroom will be required.
2. How mobile is your loved one? – Try to determine your loved one’s mobility needs. They might be ok at the moment but if they need a ceiling hoist or struggle with stairs in the future, will your design be able to support that?
3. Do you plan on moving? – Will your current house support your families needs in general. Investing in a permanent structure can be expensive if you find yourself needing to move for work or more space later on.
4. How will you fund the improvements? – If your loved one will be selling their existing house to fund the annexe, how much should be saved for care costs?
5. Will my loved one be happy living this close? – A Granny Annexe will not be the right option for everyone so don’t impose your own wants on your loved one. They may prefer to move to a retirement village or try to remain in their own home.
6. How will you share responsibility with siblings? – If you have siblings then you need to set everybody’s expectations before you venture into caring for your parent yourself. If you spend your time and money looking after your parent then you may deserve to be reimbursed or receive a greater portion of any inheritance.
7. What is the ROI (return on investment) of the improvement? – When you come to sell the house, can the annexe be converted back to living space or can a garden annexe be used as an office?

What are the benefits of buying vs building a granny annexe?

When weighing up the best option for you, consider the following:

• How quickly do you need the annexe?
• How much space do you have in your garden?
• What’s your budget?
• How close do you need to be to your loved one?

Best for small gardens

If you lack space in your garden then building an extension to your existing house or converting existing rooms may be the best solution for you. The most common reason for planning refusal is that the annexe is too big for a garden and if your garden is small this will be your primary concern. Instead, look at how you might be able to extend your house footprint or convert currently unused space in an attic.

Best for those looking to move

If you know that you will have to move in a few years then a mobile home style pre-built annexe might be a good option. It’s often possible to crane them out of the garden and take them to your new residence.

Chapter 3: Building your own granny annexe

Building your own extension can be a great option if you want to customise your design or keep the annexe attached to the main residence. There are a few different ways to go with this.

Building Options

Convert existing rooms

If your house is large enough you can consider blocking off and converting 2 – 3 existing rooms without extending the footprint of the building. The benefits of this are that you can avoid most of the planning permission considerations that a house extension will entail. In general, this method of converting your home won’t do much to improve the value of your home although it may be repurposable for a lodger at some point in the future.

Add an extension to your house

Extending the footprint of your house is one of the cheapest ways to add more space. It can also help to make the annexe feel more separate if only connected through a connector.

Build a detached annexe

If you’re looking for more space from your loved ones then a detached annexe might be a better option. It’s important to consider how many bedrooms you will need. If you need a live-in carer then they will need a bedroom to stay in close to your loved one. You may be able to convert an existing outbuilding.

Steps to build your own Granny Annexe

1. Contact an Architect – While you can draw up plans yourself and submit these to your local council, your chances of having your plan accepted are greater with an Architect.
2. Discuss your options with Architect – With an on-site visit, your architect will investigate the building and suggest some provisional ideas to extend the space to your needs.
3. Draw up plans – Your architect can then draw up detailed plans of the existing building which you can play with and sketch out ideas on.
4. Submit Application – When you’ve found the design that balances your needs and planning requirements you’ll need to submit the planning application to your local building control department.
5. Wait for the decision – While you’re waiting you can start looking for a builder. Ask your friends and family for recommendations or consider using a site where builders can bid on your jobs like mybuilder.com.
6. Get Building – pending on how ambitious your plan is this might take 3-12 weeks and will need to be inspected to check it meets building regulation during the build.

Tip: Decorate the completed rooms yourself to save money spent on a decorator.

Chapter 4: Buying a pre-built granny annexe

Many companies now offer pre-built garden cabins for your back garden with a few offering Granny Annex specialised ones.

Buying a house with an annexe already built

If you’re looking to move house already then buying a house with a pre-built annexe might be a great way to go. Finding those houses is not always easy though. We’ve already discussed how to find properties with a granny annexe in another article that you can find here.

One consideration when purchasing a house with an Annexe already is SDLT (Stamp Duty Land Tax). There is a second house levy of 3% on house purchases. In order to be required to pay the higher rate the annexe must meet the following criteria, which few will:

• Be capable of being sold separately from the main residence
• Have their own entrance
• Have their own water and electricity supply
• Receive their own Council Tax bill
• Be worth more than £40,000 on their own.

Planning Permission

A structure in your garden with someone living in it full-time will always require planning permission. In general, you will need to apply for planning permission through the usual homeowner’s route. If you do not, you risk being asked to remove the structure. The main things that your local council’s planning department will be looking for are:

The dwelling is ancillary to the main house

The dwelling must be an ancillary or subsidiary dwelling to the main house. This means that it can have it’s own living facilities e.g. kitchen, shower room, toilet but it mustn’t be larger than the main dwelling or be intended for use as a separate dwelling.

The overall size of the annexe in relation to your house and garden

Size of an Annexe is the most common reason for an application to be rejected. Your local planning authorities will judge if the annexe is a reasonable size in relation to your garden and neighbouring houses. Most pre-built annexes are a single story in order to minimise the impact on neighbours.

Suppliers

There are a number of suppliers on the market at the moment producing log cabin style annexes. In general, a pre-built annexe will come in the form of a garden annex. Smaller designs might only allow a shower room but larger ones can include a full bathroom. We’ll give a summary of the biggest here with some information on the best ones.

iHUS

Price Range	£64,000 – £113,500
Free on-site consultation?	Yes
Planning Consent Service?	Yes
Build Time	5-9 weeks
Reviews	4.5/5 (8 reviews)

Homelodge

Price Range	£28,518 – £117,000
Free on-site consultation?	No
Planning Consent Service?	Yes
Build Time	Unknown
Reviews	4.4/5 (9 reviews)

The Green Room

Price Range	Ask for pricing
Free on-site consultation?	Yes
Planning Consent Service?	Yes
Build Time	Unknown
Reviews	5/5 (30 reviews)

Chapter 6: Other questions answered

How long does it take to get planning permission for an annexe?

It will generally take your local authority 8 to 13 weeks to come to a decision on your planning application.

Do I have to pay council tax on a Granny Annexe?

The answer is yes. Your local council will determine the tax band of every area of living accommodation within your house. If it would be possible for someone to live in an annexe of your house alone then it is subject to separate council tax the band of which will be determined by your council.

The good news though is that most councils offer a 50% discount on this second council tax bill if a relative is living there. From their perspective, it often saves the council money to have more houses available and usually reduces the amount they have to pay for care in the long run.

Can I sell my Granny Annexe?

If you purchased a mobile home style Granny Annexe it’s very possible that it could be craned out of your home and sold to someone else. There are suppliers that can act as a broker of mobiles homes and will buy static mobile homes off you handling all the movement etc. You may also be able to organise a private sale through privatesalecaravans.co.uk or gumtree.

How much value does a Granny Annexe add?

To the right buyer, a granny flat will add as much value as it did to you. Plenty of families have a need for additional living accommodation, whether they plan on using it as a garden office or as a stepping stone for children leaving the house. There are plenty of examples of a granny annexe increasing the value of a house. In general, a physically separate annexe can be more desirable since it could be used as a holiday let. In addition, is no cost to converting it to normal use.

Can you rent a granny annexe?

Yes. When you rent your annexe it will generally fall under the category of a lodger rather than an assured shorthold tenancy. An assured shorthold tenancy is the normal way to rent a house and grants the renter more rights in regard to notice periods and evictions. As a landlord, you will have certain responsibilities that the government has outlined but you usually only need to give a notice period of 4 weeks. Other benefits of renting your annexe are that you can collect £7,500/year of rent tax-free under the rent a room scheme.

Find out more about renting a room here: https://www.gov.uk/rent-room-in-your-home