Can a converted detached garage be used as an annexe for a relative or rented out?

It is possible, but it is a different project from adding a room. Turning the space into separate self-contained accommodation is a change of use and is likely to require planning permission rather than falling under permitted development, so a planning application is normally the right route. A separate annexe may also be banded independently for council tax. Some newer estates carry a condition requiring the garage to stay available for parking, which needs that restriction removed first, and a lawful development certificate is a useful way to put the position beyond doubt.

If the property is a listed building, you will need to seek listed building consent, and homes in a conservation area or an area of outstanding natural beauty face tighter rules again. Check with your local authority before design work starts, or talk it through with us and we will explain the correct planning procedures for your situation. Following them properly is also what protects the value of your property later on.