How Much Does an Annex Cost & Can You Build in Your Garden?

In 2025, more homeowners are making the most of their property by building annexes—also known as granny flats or garden homes—in their own backyards. Whether you're looking to create space for a loved one, earn rental income, or increase your home's value, garden annexes offer an excellent solution. But two key questions continue to come up: how much does an annex cost to build, and can you build a house in your garden legally?

This article explores both of these questions in depth, covering costs, permissions, and tips for making the most of your garden space.

What Is a Garden Annex?

A garden annex is a self-contained living space situated in the garden of a residential property. It usually includes a bedroom, bathroom, kitchenette, and living area. Unlike sheds or outbuildings, annexes are designed for full-time or long-term occupancy.

Homeowners build garden annexes for several reasons:

• Elderly relatives or adult children living at home
  
  

• Guest accommodations
  
  

• Private office or creative studio
  
  

• Rental income
  
  

The idea of turning unused garden space into a functional home is appealing—but can you build a house in your garden legally, and what’s the cost?

How Much Does an Annex Cost to Build in 2025?

One of the most common questions homeowners ask is: how much does an annex cost to build in 2025? The answer varies widely depending on size, materials, location, and whether you're using a modular system or building from scratch.

Estimated Costs:

These figures typically include structure, insulation, heating, plumbing, and electrical systems, but may exclude landscaping, permissions, or high-end finishes.

What Affects the Cost?

When determining how much an annex costs to build, consider the following factors:

• Size and design complexity
  
  

• Prefab vs. custom build
  
  

• Materials and finishes
  
  

• Groundwork and foundation needs
  
  

• Access for construction vehicles
  
  

• Utilities hookup (water, electric, sewage)
  
  

A simple modular unit may be far more cost-effective than a bespoke construction project.

Can You Build a House in Your Garden?

Now let’s dive into the legal side: can you build a house in your garden?

1. Planning Permission

In many cases, a small annex may be built under Permitted Development Rights in the UK, provided it meets strict criteria. However, once an annex includes full living facilities (like a kitchen and bathroom), or is intended for independent use, you’ll likely need full planning permission.

You can build a house in your garden, but only if local authorities approve the structure’s intended use, size, and impact on the surroundings.

2. Building Regulations

Even with permitted development, your annex must comply with Building Regulations, covering:

• Structural integrity
  
  

• Fire safety
  
  

• Energy efficiency
  
  

• Plumbing and electrical safety
  
  

• Accessibility (in some cases)
  
  

This ensures the annex is safe, durable, and suitable for long-term living.

Does a Garden Annex Add Value?

Yes. A high-quality annex can increase your home’s resale value by 10–20%, depending on location and build quality. Buyers appreciate the flexibility of a self-contained space, whether it’s used for guests, rentals, or home businesses.

You can also rent out your annex for extra income—often between £600 and £1,500 per month—if permitted by local planning laws.

Can You Build a House in Your Garden for Someone to Live In?

Yes, you can build a house in your garden for a relative or family member to live in—especially if it's considered an ancillary building. However, it must usually be linked to the main residence in terms of utilities and usage.

If you're planning a fully independent dwelling (for rental or resale), you may face stricter planning requirements and higher taxes.

Smart Ways to Keep Costs Down

If you’re concerned about how much an annex costs to build, try these budget tips:

• Choose a modular or prefab unit – Fast, efficient, and cheaper.
  
  

• Simplify the layout – Open-plan designs are more cost-effective.
  
  

• Use standard materials – Custom finishes can drive up expenses.
  
  

• Handle the interior finishes yourself – DIY painting or decorating can save thousands.
  
  

• Get multiple quotes – Compare builders to get the best value.
  
  

Mistakes to Avoid

1. Skipping planning advice – Always check with your local council before starting.
   
   

2. Overbuilding – Avoid making your annex too large for the plot.
   
   

3. Ignoring regulations – Legal and safety issues can cause major delays.
   
   

4. Underestimating utility costs – Hookups for power, water, and sewage can be pricey.
   
   

5. Assuming it’s always allowed – Not every garden is suitable, especially in conservation areas.
   
   

Final Thoughts

So, how much does an annex cost to build? In 2025, expect to spend anywhere from £30,000 to £120,000, depending on your needs and specifications. And to answer the other big question—can you build a house in your garden—the answer is yes, but with proper permissions, compliance, and planning.

Garden annexes are a smart investment, offering flexible space, long-term value, and the potential for rental income. With careful planning and a clear understanding of local regulations, you can successfully build a comfortable and legal home right in your backyard.