Can You Afford To Renovate Your Home?
We recently published a blog post containing some top tips for planning a home renovation. Following on from that post, we thought we’d give you some more food for thought today by looking specifically at home renovation costs and potential financing options, to help you make an informed decision about any projects you might be considering.
(Please bear in mind that this blog is for information only and does not constitute advice of any form. You should obtain all the necessary approvals from the relevant bodies and seek expert professional advice before proceeding with any building or renovation work)
A couple of quick budget tips to start…
First and foremost, the primary aim when you’re carrying out any renovation work is to get your property secure and watertight as soon as possible. Failure to do so could lead to unnecessary expenses you hadn’t planned for and that’s a reality that will put a strain on your budget.
Likewise, it’s also important to plan everything meticulously and carry out all the work in a logical order. For example, don’t go ahead and plaster walls or tile a floor in a room that’s going to need services (like water, electricity and gas) added at a later date. You’ll end up doing the work twice and, again, that will have an impact on your budget.
Planning permission costs
If your property is listed, located in a conservation area, or if you’re planning to do work outside of your permitted development rights, chances are you’re going to need planning permission.
At present, a planning application in England for home improvements costs £206. But be aware that’s just the application cost and, depending on your plans, you may need to make several applications. Then you need to account for architects’ plans and special reports too, which is why a ballpark figure of £2,000 is often cited to cover this stage.
Building regulations approval
In addition to planning permission, you may also need to obtain building regulations approval.
Building regulations ensure that the design and construction of buildings meet certain safety standards. They also encompass fuel and power conservation standards too.
Professional drawings will need to be submitted to the Local Authority in your area so they can assess whether your plans meet their building regulations. Furthermore, a building control surveyor from the Local Authority will also periodically inspect the work to check ongoing compliance.
Building regulations fees start at around £80, but the overall cost could be several thousand pounds, depending on the extent of your project and the number of visits required throughout.
Is there a chance that bats are living in or close to your property? If there is, you’ll need to have a preliminary bat survey to make sure, which costs anywhere between £250 and £800. That’s because bats are protected by both UK and European law, and even disturbing their roosts or damaging, destroying or blocking access to them is a crime.
If the survey reveals that bats are present, a bat emergence survey will be required. Due to the amount of time and unsociable hours associated with this kind of survey, you can expect to pay anywhere between £1,500 and £3,000 for this work.
Example renovation costs
Obviously, home renovation costs vary widely and depend totally on the type of project you’re undertaking. Having said that though, research from Barclays – which involved speaking with builders, architects and specialists – revealed the approximate cost of many common home improvements.
Here’s what it found*:
- Creating an open-plan kitchen – Budget for around £3,500
- Bathroom makeover – Expect to pay around £2,500 for a basic refit and anything up to £6,000+ for a luxury bathroom
- Add a conservatory – From less than £5,000 to upwards of £17,000
- Garage conversion – Between £5,00 and £7,000
- Loft conversion – Around £20,000 to £45,000 (depending on work involved)
- Basement – Expect to pay £1,500 per square metre for a straight conversion and up to £3,000 per square metre if you’re starting from scratch
(*Source: Barclays.co.uk “House Renovation Costs: An expert guide for every budget” 2019)
Sources of finance
So as you can see, home renovations vary significantly in price. That’s why you need to be pretty clear about what you are doing before you even begin (and ensure you have adequate budget in place).
While the most financially savvy way to finance a home renovation is by using any savings you have, not everyone is in a position to do this. So what are your options?
Fortunately, you’ve got a few alleys to explore to make your home renovation dreams a reality, but the most important piece of advice to remember is that if you do need to borrow money, choose the option that sees you borrowing over the shortest period of time. Moreover, consider the total cost of the borrowing, not just the monthly payments.
Increase your mortgage
If your home has increased in value since you bought it, there’s a chance you could borrow more from your mortgage lender. However, be aware that any extra mortgage you agree is likely to be on different terms than your existing deal.
The advantages are that you can typically spread the cost of the borrowing over a longer period and enjoy lower interest rates than a personal loan.
Peer to peer loans
In recent times, a new lending platform has emerged and it’s proving quite popular. Peer to peer lending, as they are known, involve you borrowing money from other everyday people.
The “lenders” actively want people to borrow from them and the resulting loan is based on both parties’ requirements.
With no traditional financial institutions involved, the peer to peer lending platforms act as an intermediary and oversee the transaction. If you’ve got an excellent credit history and no previous lending problems, peer to peer loans are a great way to secure the financing you need to complete your home renovations.
A quick Google search should bring up plenty of potential peer to peer loan services that will suit your needs.
Get an unsecured personal loan
Unlike mortgages, unsecured personal loans do not put your property at risk. But they will see you borrowing money at a rate and on terms that aren’t as favourable as you’ll get from your mortgage lender.
That’s why you should always be cautious when considering personal loans. While your property might not be at risk, you could end up paying over the odds for your financing and that will ultimately reduce the value of your home improvement project.
Sorry, but as we’ve already mentioned, paying for home improvements using savings is always the most cost effective method. That’s why it’s always advisable to try and save money before you begin any home renovation projects.
Ask yourself, do I need to undertake this project right now or can I wait until I (we) have saved the funds? If the latter is true, do that. Regardless of how much home improvements will increase the value of your home, if you have to borrow money to pay for them, their true value will always be diminished.
Have a home renovation project in mind already? Our team of rooflight specialists are here to help. Contact us today if you would like more information about any of our products.