Modular and prefab granny annexes: a buyer's guide

A modular or prefab annexe is made mostly in a factory and finished in your garden. Some arrive as flat panels put up over a few weeks, and others as finished boxes lifted into place by crane. Either way, less of the work happens on site than with a brick annexe. If you are still weighing up whether an annexe is the right answer at all, the guide to granny annexes sets out the three ways families set one up, and care at home or a care home compares the wider choices.

The Garden Room Guide found that a specialist's advertised price usually covers the structural frame and insulation, cladding and roofing to a standard finish, windows and outside doors, inside walls and plasterboard, a standard kitchen and bathroom, and delivery. It does not usually cover the groundwork and base, the connections to mains water, power and drainage, planning or certificate fees, or furniture and white goods. The guides measure slightly different things, which is why their figures do not line up.

For a parent who may need help later, a slightly larger bathroom and wider doorways are easier to build in at the start than to add afterwards, and designing a granny annexe for care needs goes through what to plan for. For the cost of brick, timber frame and garage conversions set against each other, read how much it costs to build a granny annexe.

The split that matters most is between a building and a caravan. A timber frame or SIPs annexe is a building in law, however quickly it went up. It needs a planning application if it will be self-contained, and building regulations approval for the structure, fire safety, insulation, drainage and electrics. A twin-unit mobile home is a caravan in law if it meets the definition in section 13 of the Caravan Sites Act 1968: no more than two sections, joined on site with bolts, clamps or similar fixings, capable of being moved by road once assembled, and no larger than 20 metres long, 6.8 metres wide and 3.05 metres high inside. A log cabin can fall on either side of that line, depending on how it was designed, so ask the supplier which route theirs is built for before you look at anything else.

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Most granny annexes are charged VAT at 20%. The zero rate for a new home under HMRC's VAT Notice 708 only covers a building that could be used or sold as a separate home, and an annexe built for a relative in the garden of the family house usually cannot. A residential caravan is treated differently. Under section 2.2 of VAT Notice 701/20, a caravan made to the BS3632 residential standard and longer than 7 metres or wider than 2.55 metres is zero-rated. The fitted kitchen and bathroom are included, but removable contents such as the fridge, carpets and furniture still carry VAT. Ask for the VAT to be shown separately on every quote. A timber frame or SIPs annexe with planning permission also becomes part of the house, and do granny annexes add value explains what that can mean for its price.

The decision belongs to your council, and with a caravan it rests on how the annexe will be used, not on what it is called. If the council later decides your parent's annexe is a separate home rather than part of the household, it can ask for a planning application after the money is spent. A Lawful Development Certificate for the proposed use, applied for before you order, is the safest way to settle that, and it costs half the fee for the equivalent full application. The permitted development technical guidance on gov.uk sets out the outbuilding rules in full.

Once the annexe exists, its council tax position depends on whether it is self-contained and who lives in it. Is a granny annexe subject to council tax covers how an annexe is banded and the reductions that can apply when a relative lives in it.

The Garden Room Guide found that the base and mains connections together typically add £15,000 to £20,000 to specialists' advertised prices when neither is included. Some suppliers offer a turnkey price that includes the base and connections, and some leave all of it to you and your own builder. Neither is wrong, but a low headline price with everything else left to you is not cheaper until you have priced the rest.

If the annexe is for a parent who will need help at home, the cost of care is worth adding to the comparison too. Carers on PrimeCarers charge £18 to £25 an hour for visits, with our fee included, and care in a granny annexe explains how visits, nights and live-in help can work when a parent lives at the bottom of the garden.

1. 1

   A small deposit when you sign

   No more than 25%

   Citizens Advice suggests pushing the deposit down as far as you can and agreeing to no more than 25%. Ask what the deposit pays for. It should cover materials ordered for your annexe, not a large share of the price.
2. 2

   A payment when the base is ready

   If the supplier builds it

   If the supplier is laying the base, pay for it once it is done and inspected. If your own builder is laying it, you pay them directly and the supplier is not involved.
3. 3

   A payment on delivery

   Once you have seen it

   Pay the delivery stage when the building or panels are on site and you have checked them against the specification. Avoid paying for the whole building while it is still in the factory.
4. 4

   The last payment after the snags are fixed

   On completion

   Walk round with the supplier, list anything unfinished or faulty, and agree in writing what is held back until it is put right. Building control or the certificate for the electrics should be in hand before the final payment.

A written contract should set out the price, what it includes, the stage payments and what each one is due on, the delivery date, and what happens if either side cancels. Citizens Advice's guide to getting building work done suggests written quotes from at least three traders and staged payments, so problems can be put right before you pay the last one. Under the Consumer Rights Act 2015, a trader has to do the work with reasonable care and skill.

If a supplier stops trading before your annexe is delivered, you may have to register as a creditor and wait, and Citizens Advice notes there is no guarantee of getting money back. Citizens Advice also describes a 14-day cooling-off period for many home improvement contracts. The regulations behind it do not cover contracts to construct new buildings, so do not assume you can cancel a made-to-order annexe once you have signed. Ask for the supplier's cancellation terms in writing first.

Ask to see an annexe the supplier has finished, and compare at least three suppliers on the same list. If the annexe is for a parent who already needs help, or may soon, think about the care as well as the building. A carer visits an annexe in the same way as any other home, and when you get closer to moving day you can search for carers near you and compare their rates.