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I'm seeing this a lot. I know a few architects and builders who specialise in domestic extensions whose work is drying up and they are worried.
I had to work quite hard to get my loft conversion to make a "profit". However, even if it only pays its way, we wouldn't have been able to buy a bigger place, but can pay for the loft in various/staged ways; so can move up a step on the ladder incrementally.
I'd echo what others have said RE: how much things cost. To the point that even though we'd always planned to do a loft conversion in the future so the kids can have separate rooms, I'm now leaning towards looking for a bigger place/extra room, as the price difference in houses is probably half that of doing the work.
Also if you're relaying on sub-contracting out trades, be prepared for everything taking a lot more time than hoped for / do lots of chasing to get folks through the door.