Renovation golden rules: Seven steps to success on your project
Nearly one in five (18%) people have had home improvements or renovations done in the past six months, according to a survey for Hargreaves Lansdown.
The investment platform said 7% are having work done right now, and 16% plan it in the next six months.
All in all, it means 42% of people are joining the renovation boom.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Facelifts are in fashion: skips are lining every street in the UK, as we blow our lockdown savings on property renovation.
“Unfortunately, the clamour for home improvements, alongside global supply chain hold-ups, has meant the price of materials is up an eye-watering 17% in a year, so the cost of renovations is also soaring. It means you need to follow the seven golden rules to keep your facelift finances on track.
“In some cases, renovations have been paid for with lockdown savings. In fact, when we asked people how they spent these savings, this was the most common answer: 29% of those who have dipped into them, spent at least some of the money on home improvements.
“Many homeowners consider this a sensible way to put the money into an asset that tends to grow in value over time. The ideas is that not only can they enjoy the improvements now, but they may help protect or add to the value of their home. However, not every home improvement adds value, and house prices can’t be guaranteed to rise forever. It means we can’t assume this is an investment: sometimes we’re just spending money to make our home a nicer place to live.”
Seven golden renovation rules
Hargreaves Lansdown has published its seven golden rules to help your renovation project go as smoothly as possible:
1. Set a realistic budget
Don’t start with grand plans of what you want to have done. Start with the money you’ve decided is sensible to spend and work from there. You may not be able to afford everything you want to do, but it’s best to be clear about that from the very beginning.
2. Have a contingency
Don’t make a plan to spend every penny you have. You need a contingency of at least 10% on top. No renovation project ever goes entirely to plan, and you need space in your budget to adapt.
3. Plan carefully
If you’re managing the project yourself, think about every inch of the work, who you need to work on it, and the timing of when they need to do it. It’s very easy for delays and expense to creep in if you skimp on the planning stage.
4. Get a number of quotes
It doesn’t always pay to go with the cheapest, but it doesn’t mean you should go for the first one either. Talk to a number of builders and specialist tradespeople and find the people you trust to do a good job at a reasonable price.
5. Only do it yourself if you have the skills
If you’re good at DIY, you can save money by doing some of the work yourself, but if you don’t have the skills, you could end up having to pay someone else to sort out problems you have created. If you haven’t set aside a budget for this, it could come back to bite you.
6. If you have to borrow, do the maths
If you don’t have the savings to cover the work, think about the most sensible way to borrow – whether that’s remortgaging, a personal loan or a credit card. Do your calculations for each and work out the lowest possible cost of borrowing when all the fees and charges are factored in. Don’t forget that if you remortgage, you may be spreading the cost over a longer period, so the interest will add up.
7. Consider the value you’re adding
You won’t be guaranteed to add as much value as you spend. Often things like kitchens and bathrooms do very little to the value but can cost a fortune. You might want to go ahead with the work anyway, but you should know where you stand. Also bear in mind the ceiling price for the road. If you plough too much into renovations for the area and type of house, you may not make your money back when you sell.