The short answer
- A well-finished annexe adds around 20% to 30%Industry estimates put a self-contained annexe, with its own kitchen, bathroom and entrance, at this range. A basic build adds nearer 10% to 15%.
- Demand is part of the valueBuyers are actively looking for houses with an annexe, for an older relative, adult children, rental income, or flexible extra space, and houses with a genuine annexe are in short supply against that demand.
- A lost garden or a missing permission can wipe out the gainAn annexe that takes most of the garden, or was never given planning permission, can add less than expected, or reduce the value.
- Buying a house with an annexe now costs more in stamp dutyThe tax relief that used to apply was withdrawn in 2024, so factor the full stamp duty bill in before you compare properties.
Figures are UK property industry estimates for 2026. They are not a valuation of any specific property.
How much it adds
How much value a well-built granny annexe can add
The uplift is not fixed. It moves with how the annexe is built, and it is usually described as a range rather than a single number.
Industry estimates put a self-contained annexe, one with its own kitchen, bathroom and entrance, at around 20% to 30% on top of what the house was worth before, averaging around 25%. A basic annexe, built more simply or sharing services with the main house, tends to add nearer 10% to 15%. The visual below works both ranges through on an example house price, so the percentages mean something in pounds.
Built to a basic standard
Shared services, no separate kitchen or bathroom, or an awkward layout
+10% to +15%, £40,000 to £60,000 added
Self-contained and well finished
Its own kitchen, bathroom and entrance, built to a good standard
+20% to +30%, £80,000 to £120,000 added
Figures are industry estimates for a self-contained garden or attached annexe, not a valuation of any specific property. A poor-quality build, or one that leaves little garden behind, can add less than the basic-standard range, or nothing at all.
The gap between the two ranges is mostly about finish and independence. A buyer paying for an annexe wants somewhere a relative, grown-up child or tenant can live properly, with a door of their own. If it looks and feels like an extension with a bed in it, it is priced closer to an extension. The cost of building a granny annexe sets typical build costs against this uplift, so you can see whether the numbers work for your project.
There is also a case for the annexe paying for itself before you ever sell. Renting it out, whether to a family member at a reduced rate or to a tenant at the market rate, can bring in income that offsets some of what it cost to build.
Why buyers want one
Why buyers are actively looking for a house with an annexe
Some of the value comes from what the annexe is worth on paper. Some of it comes from how many buyers want exactly this, and how few houses offer it.
Room for an older relative
Independent space for grown-up children
A source of rental income
Fewer of them for sale than buyers looking
Not every buyer wants the annexe for a relative or a tenant. Some want a home office, a studio, or somewhere for visiting friends to stay, and that wider appeal is part of what keeps demand ahead of supply.
If you are searching for a house that already has one, rather than building your own, finding an annexe for sale on Rightmove covers how to search for one specifically.
What can reduce it
What stops an annexe adding the value you are expecting
The same annexe can add a great deal of value or very little, depending on three things that are easy to get wrong.
Protects the value
- A self-contained layout with its own kitchen, bathroom and entrance
- Planning permission and building regulations approval in place
- A small patio or courtyard kept for the annexe, rather than none at all
- A finish that matches the quality of the main house
Reduces or removes it
- An annexe that takes up most or all of the usable garden
- No planning permission, which a buyer's solicitor will find and can hold up or kill a sale
- A cramped or shared layout that reads as a large shed rather than a home
- Assuming the deal on stamp duty still works the way it used to
Whether you need planning permission for a granny annexe depends on its size and how self-contained it is, and it is worth checking before you build rather than after. Once it exists, a self-contained annexe can also be rated separately for council tax, which is a running cost worth weighing against the value it adds.
Getting it right
Steps that protect the value before you build or buy
Most of what decides whether an annexe adds value or eats into it is settled before the first brick, or before you view the house.
- 1
Check planning permission before you design anything
Before you buildA self-contained annexe with its own kitchen and bathroom almost always needs it. Building without it can mean paying to change the design later, or a buyer's solicitor stalling the sale. - 2
Keep some garden for the annexe itself
While designingA small patio or courtyard costs little and stops the annexe reading as having swallowed the outdoor space, which is one of the more common reasons the uplift falls short. - 3
Ask a local estate agent to value the house with and without it
Before you commitA local agent who has sold similar houses recently will give a better estimate for your street than a national percentage. - 4
If the annexe is for a parent who needs help day to day, plan the care alongside it
Before they move inLiving closer does not by itself cover the hours somebody needs. Search hourly carers near the annexe's postcode to see rates and availability before your parent moves in.
Questions
Questions families ask about granny annexes and value
Not always. A self-contained, well-finished annexe usually adds value, often estimated at 20% to 30%. A poorly built one, or one that takes up most of the garden, can add much less, and in some cases none at all. The quality of the build and how much outdoor space is left both matter more than the size of the annexe.
Industry estimates put a self-contained annexe, with its own kitchen, bathroom and entrance, at around 20% to 30%, averaging around 25%. A more basic annexe, without its own facilities or built more simply, tends to add nearer 10% to 15%. These are estimates rather than a guarantee for any specific property.
Usually yes, if it is self-contained with its own kitchen and bathroom, since sleeping accommodation of that kind does not count as incidental to the main house. Some smaller, non-self-contained annexes can fall under permitted development. Do you need planning permission for a granny annexe sets out the rules in full.
A self-contained annexe can be given its own council tax band, though discounts and exemptions apply if a dependent relative lives in it. Is a granny annexe subject to council tax covers who qualifies and how to apply.
Yes, for purchases completing on or after 1 June 2024. A relief that used to reduce Stamp Duty Land Tax on a house bought with a separate annexe was withdrawn that year. Ask a solicitor for the current figure before you offer on a property with an annexe, since it can be several thousand pounds more than it would have been under the old rules.
Then the value question matters less than whether the arrangement works day to day. An annexe keeps a parent close and independent, but it does not by itself cover washing, meals or medication if they need regular help with those. A carer found through hourly care can visit the annexe in the same way as any other home.