Home renovation can quickly cost more than you expect. This refresh checks the practical tips we published earlier, and flags what has changed in the current environment around costs, borrowing, and government support.
What has changed since we last reviewed this
A few things have shifted that are worth knowing before you start planning:
- Construction costs have risen. Material and labour costs in the UK have increased over recent years, meaning renovation budgets that felt comfortable a couple of years ago may need revisiting. Checking current trade prices before you commit is a useful first step.
- Borrowing costs are higher than they were. The Bank of England base rate rose significantly from its historic low of 0.1% in late 2021. If you are planning to fund work through a personal loan or home improvement loan, the interest rate you are offered today is likely to be higher than it would have been in 2021 or 2022. Using a loan repayment calculator before you apply can help you see the full cost.
- Government energy improvement schemes have been updated. The ECO4 scheme and the Great British Insulation Scheme are the current main routes for government-backed help with insulation and energy efficiency. Eligibility rules and availability should be checked directly on GOV.UK, as these change periodically.
Why it matters
Renovation projects that run over budget can put real pressure on your finances, particularly if you have borrowed to fund the work. Understanding what things cost now, and what support may be available, helps you plan more honestly before you start.
Who may be affected
- Homeowners planning any kind of improvement or repair project
- Anyone considering a personal loan or home improvement loan to fund renovation work
- Households who may qualify for energy efficiency support through a government scheme
What has stayed the same
The core tips remain sound. A simple way to think about it is that good preparation tends to be the biggest single factor in keeping costs down. The tips that hold up well include:
- Set a realistic budget before anything else. Include a contingency for the unexpected. A 15 to 20 per cent contingency on top of your quoted costs is a commonly cited rule of thumb, though the right amount depends on the age and condition of your property.
- Get at least three quotes for any significant work. MoneyHelper recommends comparing several quotes rather than accepting the first offer.
- Separate needs from wants. Start with work that is structurally necessary or that reduces running costs, before moving to cosmetic improvements.
- Check what you can do yourself. Some preparation and finishing tasks (painting, tiling, decorating) can be done without a tradesperson. Be realistic about your skill level and the time involved.
- Use reclaimed or surplus materials where safe to do so. Architectural salvage yards and surplus building material suppliers can offer significant savings on things like tiles, timber, and sanitaryware.
- Time your project where you can. Tradespeople are often less busy in January and February, which can mean more flexible pricing.
- Check permitted development rights before you start. Some work requires planning permission. Getting this wrong can be costly. GOV.UK has a planning portal that can help you check.
- Understand what your home insurance covers during works. Some policies limit or exclude cover while building work is in progress. Check this before deciding whether to notify your insurer.
What to read next
If you are thinking about borrowing to fund home improvements, it is worth reading about your options first.
You may also find the loan repayment calculator and budget planner helpful before you apply for anything.
Sources
- MoneyHelper, home improvements and renovations guidance ([moneyhelper])
- Bank of England, base rate data ([bank-of-england])
- UK Government, ECO4 and Great British Insulation Scheme ([uk-government])