Funding for Home Improvements
The recent cost-of-living rise has left many people wondering whether they can still afford to pay for property renovations and repairs. Whether you’re looking to build an extension or replace a boiler, there are ways to find funding for home improvements.
And with the latest announcement in the Spring Budget, there’s currently no VAT payable for green improvements. So, despite the volatile financial landscape, now could be a good time to make certain improvements to your home, taking advantage of any available tax relief.
How much does a home extension cost?
At the time of writing, there are many challenges in the construction sector, which are mainly due to material shortages such as bricks, glass, steel, cables and boilers. As result, this has driven the cost up of building an extension, along with lengthy delays. So, you will need to plan ahead, but this will at least give you more time to save up for your home renovation.
We look at some stats to see how much a home extension could set you back:
- £1,350 – £2,250 per m² – average cost of a single storey house extension.
- £1,000 per m² – average cost of a garage conversion into an office or workshop.
- £500 – £2,500 – average cost of a new combi boiler without installation charges.
The true cost of a house extension will depend on the availability and quality of the materials used, the size and shape of the building, number of windows and any plumbing involved. You may need to factor in various fees, such as an architect, structural engineer, surveys, insurance, and for planning permission and building regulations. You will also need to include project management costs if you do not intend to be fully involved with the project.
Green home improvements
In the recent Spring Statement, Chancellor Rishi Sunak announced there will be zero VAT payable on green home improvements. One way to offset escalating energy costs is by modifying your home to become more energy efficient. Installing solar panels, for example, could save a typical family £1,000 and then a further £300 a year on energy bills. This VAT tax relief also applies to heat pumps and insulation.
Of course, you will still need to find the cash for these green improvements and an average solar panel installation is around £4,800. So, how can you access funding to pay out for green home modifications?
Releasing equity for home improvements
One potential way to access a lump sum for home improvements is through equity release. First, check to see if you have any equity in your home. If your home is worth more than you paid for it originally, you could have some positive equity. By releasing equity from your property, you might be able to access enough funds to renovate or repair aspects of your home, avoiding the need to dip into any savings or investments.
Known as a Lifetime Mortgage, equity release is available to those aged 55 or over and can enable you to unlock the value of your home. It’s a type of long-term loan, which only gets repaid after you pass away when your home is sold or if you have to go into long-term care.
For advice on equity release, always speak to a specialist whole-of-market mortgage broker.
If you’re an accountant or IFA with a client who needs to unlock money from the value of their home, please get in touch. Equity release is a highly regulated area, and we comply with every regulation. We may be able to offer your client a simple, safe and practical solution to help them pay for any renovations or repairs.
If you need funding for home improvements or you need to pay for a major house repair, talk to our friendly team for advice. Call 01455 238 650 or send us an enquiry.