Home improvements

Improving a home can enhance how you live in it, meet changing household needs, improve comfort or energy efficiency and, in some cases, increase its appeal to future buyers.

The right project starts with a clear objective, realistic costs, appropriate permissions and a funding strategy that remains affordable. This guide explains the key points to consider before committing to building work or borrowing.

At a glance

Why homeowners improve their properties

Common reasons include:

• Creating additional living space.
• Extending or reconfiguring the property.
• Modernising a kitchen or bathroom.
• Creating a home-working area.
• Improving accessibility.
• Repairing or maintaining the property.
• Improving insulation, heating or energy efficiency.
• Improving outdoor space, parking or storage.

A project may be worthwhile because it improves day-to-day living even where it does not generate a financial return.

Define the project before setting the budget

Start by identifying:

• The problem the work is intended to solve.
• The essential work and optional features.
• The required standard of finish.
• Whether a smaller or staged project could meet the need.
• The intended start and completion dates.
• How disruption will be managed.
• Whether you expect to remain in the property long enough to benefit.

A clear written scope makes quotations easier to compare and reduces the risk of misunderstandings.

Build a realistic budget

The budget may need to include:

Check permissions and legal requirements

Planning permission and building regulations are different. Some work may need one, both or neither. Depending on the property and project, you may need to consider:

• Planning permission or permitted-development rules.
• Building regulations approval.
• Party Wall etc. Act requirements.
• Listed building consent.
• Conservation-area restrictions.
• Leaseholder, freeholder or management-company consent.
• Restrictive covenants.
• Rights of way, drainage or boundary issues.
• Consent from the mortgage lender or insurer.

Requirements differ across the UK and between properties. Check the position with the relevant local authority and appropriately qualified legal or construction professionals before work begins.

Keep approvals, certificates, warranties and invoices safely. They may be needed when selling, remortgaging or making an insurance claim.

Choosing professionals and contractors

Obtain quotations based on the same written scope where possible. Check:

• Relevant experience and qualifications.
• References and examples of completed work.
• Insurance and membership of appropriate schemes.
• Whether subcontractors will be used.
• What the quotation includes and excludes.
• Payment stages and retention arrangements.
• Start date, programme and expected completion.
• How variations and unforeseen work will be agreed.
• Warranties, guarantees and certification.

The lowest quotation is not automatically the best option. Avoid paying an unnecessarily large amount in advance, and use a written contract appropriate to the project.

Funding options

There is no single correct way to fund home improvements. The appropriate route depends on the project, available savings, affordability, existing borrowing and future plans.

Savings

Savings avoid borrowing costs and monthly repayments.

Unsecured personal borrowing

A personal loan or other unsecured credit may suit some smaller or shorter-term projects.

Do not assume that a low or 0% promotional rate will remain available. Have a clear repayment plan before using credit.

Mortgage-based borrowing

For larger projects, mortgage-based borrowing may be considered through:

• A further advance from the existing lender.
• A remortgage with additional borrowing.
• A second charge mortgage.

Secured borrowing may reduce the immediate monthly cost by spreading repayment over a longer term, but this can increase total interest. Fees and early repayment charges may also apply.

Refer to MMPE’s Borrowing Additional Funds guide for a fuller comparison of further advances, remortgaging and second charge mortgages.

Match the finance to the project

The funding term should reflect the useful life of the improvement and the household’s plans.

For example, spreading the cost of short-lived furnishings or appliances over a long mortgage term can mean continuing to repay them after replacement is needed. Long-term secured borrowing may be more proportionate for substantial structural work, but the full cost and risks still need careful assessment.

Consider:

• The total amount required.
• When payments to contractors will fall due.
• Whether the project could be completed in stages.
• The monthly payment and repayment term.
• Fees and early repayment charges.
• Whether the borrowing may extend into retirement.
• Plans to move or repay early.
• The financial safety margin after completion.

Improvements and future property value

Improvements may affect buyer appeal and saleability, but the outcome depends on location, property type, quality of work, market conditions and buyer preferences.

Additional living space

Extensions, loft conversions and reconfigured layouts can create useful space. Before proceeding, consider whether the completed layout is practical, whether the work is properly authorised and whether the cost is proportionate to comparable properties locally.

Kitchens and bathrooms

Well-planned kitchens and bathrooms can improve everyday use and presentation. Highly personalised or premium specifications may not be reflected fully in a future sale price.

Energy efficiency

Insulation, heating improvements, controls, windows and renewable technologies may improve comfort and reduce energy consumption. The actual benefit depends on the property, installation quality, energy use and future energy prices.

Repairs and external work

Roof repairs, windows, drainage, pointing, exterior maintenance, parking and landscaping may protect the property and improve first impressions. Essential maintenance should not be confused with guaranteed value creation.

Energy-efficiency support

Government, local-authority and energy-supplier support may be available for some households and measures. Schemes, eligibility and funding levels change.

Before relying on support:

• Check current official information.
• Confirm eligibility before signing a contract.
• Understand which organisation provides the funding.
• Use appropriately accredited installers where required.
• Confirm whether you must contribute toward the work.
• Check warranties, consumer protections and aftercare.

Do not commit to work solely on the assumption that grant funding will be approved.

Insurance considerations

Tell the buildings insurer about material alterations, structural work or periods when the property will be unoccupied. Standard cover may be restricted during major works.

Check:

• Whether the existing policy covers the planned work.
• Whether specialist renovation insurance is required.
• Contractor public-liability and employers’ liability cover.
• Cover for materials, tools and temporary accommodation.
• Whether the sum insured remains appropriate after completion.
• When the insurer needs to be notified.

Common risks and how to manage them

Your home-improvement checklist

Before work begins:

• Define the objective and written scope.
• Separate essential work from optional features.
• Establish the full budget and contingency.
• Obtain comparable quotations.
• Check contractor credentials and insurance.
• Confirm planning, building regulations and other consents.
• Review the title, lease and party-wall position where relevant.
• Notify the mortgage lender and insurer where required.
• Choose a funding route and review affordability.
• Retain adequate emergency savings.
• Agree a written contract, payment stages and variation process.
• Plan for disruption, security and temporary accommodation.
• Keep approvals, certificates, warranties and invoices.

Questions to ask before proceeding

• What need will this project meet?
• Could a smaller or staged project achieve the objective?
• What is included and excluded from the budget?
• What contingency is available?
• Which permissions and professional services are required?
• Is borrowing necessary and proportionate?
• What will the monthly and total borrowing cost be?
• Would repayment extend beyond the useful life of the work?
• How would the budget cope if costs or payments increased?
• What emergency savings will remain?
• How long do I expect to stay in the property?
• Have I considered the impact on insurance and future saleability?

MMPE’s approach

Glossary

This guide is for informational purposes only and was accurate at the date of publication. Please seek personalised advice before making financial decisions.