How to Fund Home Improvements

How to Fund Home Improvements
Home Blog How To Fund Home Improvements
Kellie Steed

Author: Kellie Steed

Content Writer

Updated: March 18, 2024

Carrying out home improvements can offer both immediate and long-term benefits, and may be just the solution to shake things up a bit if you’ve found yourself in a bit of a rut with your current surroundings. In this post, we’ll explore some affordable, yet impactful home improvement options, as well as the best ways to fund those changes requiring a bit more financial investment.

A little can go a long way

House prices are historically high in 2022, and mortgage interest rates continue to rise, so if you’re bored or limited by your current home, rectifying that might not be as simple as moving somewhere bigger or more suitable right away. A simple alternative can be to make your current home more livable in the meantime, whilst increasing the value for future sale.

Home improvements can include anything from painting a few feature walls through to adding an extension, and it’s not always necessary to spend tens of thousands of pounds to make a positive impact. No matter how much you spend on improvements to your property you can usually chalk it up as a sound investment.

Visual improvements

It’s sometimes surprising how much impact colour can have on how you feel about a space, so a simple can of paint and some decent decorating tools can brighten up your home for less than £50.

In fact, there are a wide range of home improvements that can be completed without a huge financial outlay. Here are some inspired lower-cost home improvement options, and ideas for how you can go about funding them:

Investing your time

Before you even begin spending, if you’re looking for ways to add pleasure and value to your living space, there are some impactful changes you can make by simply investing time and effort. Decluttering and generally sprucing up your home and garden, can help you rediscover what you love about your home, as well as make it more desirable to prospective buyers, should you be looking to move in the near future.

Savings are there for a reason

If you have them, dipping into savings to fund smaller improvements, such as redecorating and/or reorganising your space with a few modern storage solutions can be money well spent.

Whether you’re planning to sell your home, or just need a change, the effect a sofa cover and some new throw pillows can have on a living space should not be underestimated. A simple stand-out piece of art can also transform even the dullest living room into a newly found haven without breaking the bank.

Credit Cards to spread the cost

If you’re looking to replace larger fixtures in your home, such as the bathroom suite or kitchen appliances, a credit card can be a reasonable option. With so many card providers on the market, there’s plenty of competition and it’s sometimes possible to take advantage of 0% interest periods when you open a new account or transfer your balance.

Providing you fully repay your card balance within the 0% period, it’s a great way to spread the cost of home improvements without incurring additional charges. You’ll also benefit from an added layer of consumer protection when buying with a credit card, which can be helpful if your new purchases don’t quite live up to their expectations.

Unsecured loans

If you’re looking at more than a few thousand pounds of expenditure, a personal loan could be a more cost-effective option than a credit card. Something slightly more overt, such as landscaping your back garden and adding an area of decking, for example, can add as much as 25% to the resale value of your home for less than £5k, not to mention making a more enjoyable space for you in the meantime.

Interest rates on this type of loan vary, and whilst they’re generally higher than on secured loans, they tend to be lower than credit card rates. The better your credit rate, the more competitive interest rate you’re likely to qualify for, and whilst you’ll need to maintain repayments to keep your credit record in check, there is no risk to your property with this type of loan, even if you do default.

Larger or structural developments

Of course if you’ve already completed all of the above and the love you once had for your home is not yet fully reinvigorated, or you’re looking to make more space with an extension, loft conversion, or even an annex, you’ll probably need to consider alternative funding options.

Here are some that may be more suited to larger-scale home improvements:

Secured loans strike fear into many borrowers, as the assets you use as collateral are obviously vulnerable to loss if you’re unable to keep up with repayments. That said, they also provide significant benefits over unsecured loans, such as greater borrowing limits, and lower interest rates. They are also more easily obtainable for applicants with a less-than-perfect credit record.

You can often borrow as much as £100,000, depending on your circumstances, so this option could be used to carry out a loft conversion, potentially adding an additional bedroom to your home. An additional bedroom is one of the simplest ways to push the value of your home into the next price bracket, but can also remove the need to move to a larger property if a lack of space is your main concern.

Balance is key

Finding the right balance of investment vs benefit can be difficult and you’ll need to consider why you’re making changes to your home to do so. If you’re purely looking to improve the resale value, it’s important to understand that there is a limit to how much you can possibly increase this, so be careful not to invest more than you’re likely to gain from an increase in sale price.

Another thing to be mindful of if you’re planning on a swift move post-renovation is the impact that a remortgage could have on your borrowing position when it comes to buying your next home. Whereas if you’re planning to improve your forever home, of course,  you may well consider more elaborate expenditure to be justifiable.

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