There comes a time for every family when they have to face property facts. There's only so long you can share a room with a newborn baby, and when they're old enough to speak you don't want their first words to be 'give me some privacy'. Likewise, you just can't squeeze a family of five into a two bedroomed flat, unless you're a big fan of noisy arguments.

And at that point you have the tricky decision of whether to move or improve.

In the past the numbers always stacked up fairly convincingly in favour of doing the work. If you had the space to extend, or an unused loft or basement, it was far cheaper making an extra room or two than trading up. But with property prices having fallen, how has the calculation changed?

The cost of trading up has gone down in many areas of the country, and in the last year has been cheaper than any other time for the past five years. Now, on average, it costs around £32,000 rather than £42,000 to trade up from one to two bedrooms. The cost of trading from two to three has gone from around £66,000 to around £60,000.

However, in addition, you have to add to that the cost of moving itself, which can easily run to as much as £9,000 after estate agency fees, legals fees, surveys, removals and stamp duty.

So you have to do the maths. Will adding an extra room cost you more than £40,000? And does trading up cost more than the average in your area?

In the majority of cases, the choice is clear, improvements remain the cheapest option. A loft conversion, for example, tends to come in around £35,000 outside central London (where the price of both moving and improving are substantially higher than elsewhere). Meanwhile, a single story extension is yours for an average of £25,000. If you do either of them yourself, you could get that extra room for as little as £5,000, but you have to be a building expert with endless time and patience on your hands.

So the financial choice remains to improve in the vast majority of cases, as long as your property has the potential, and you have the stomach for it.

However, on the flip side, the economics of borrowing more against the equity in your home in order to fund the work have changed too. Getting a new mortgage may not be straightforward, especially one that eats into the equity in your home. So before you jump in with both feet, it's worth having a conversation with your lender or a mortgage broker to see where you stand.