UK homeowners to spend a record-breaking £217 billion on property renovations
Since the pandemic, there has been an increase in demand for property renovations, with 359,000 homes looking to be renovated before the end of 2024. But with renovations costing over 40% more than in 2020, we take a look at how much this will affect homeowners renovating their properties.
Quite simply, COVID-19. The pandemic was a catalyst for spurring demand for changing the way the UK public perceived their home and work-life balance. The various restrictions, including three lockdowns throughout 2020-21, saw the UK forced to stay at home and holiday makers effectively banned from foreign travel. Together with the huge government support, via an unprecedented furlough scheme, homeowners both needed more space due to the work-from-home necessity and also had the financial means to afford refurbishment and renovation projects. Upon reflection, whilst many have returned to office working, the pandemic has shifted people’s aspirations for striking a better work-life balance.
Changing a space at home to a fully functional home office was among the most common renovations seen in 2020. According to Rated People, the pandemic inspired 15% of homeowners to improve their space into a home office setting, and 13% of people took up full-fledged renovation projects to build their dream home.
The most common areas the homeowners renovated are:
- Garden rooms
There have been several additions to this list. For instance, homeowners are now willing to spend more on home gyms, outdoor entertainment areas, hot tubs, lavish bathrooms, and garden improvements. The idea is to have an all-inclusive experience at home, minimising the need to go out. Essentially, what we saw in hotel suites or holiday homes previously is increasingly now becoming a part of homes in the UK.
Stephen Clark from Finbri, a bridging loan broker who specialises in property renovation finance has noticed this trend saying, “The pandemic and its lockdowns meant people were at home more than ever and with holidays cancelled and other ways of spending disposable income such a dinners or even trips to the pubs, there’s been an increased demand for major home renovations and refurbishments.
“But with renovation costs increasing significantly, we’ve seen more people turning to alternative finance to realise their home improvement goals.
“Combined with UK house asking prices reaching biggest increases in 20 years, these renovations are not just seen as an aesthetic and comfort improvement, they are also looked upon as an investment to increase the value of their property.”
Although there is an increase in the number of renovations taking place, there has also been a significant increase in their cost.
The need for home improvements has increased the renovation industry tenfold. In just two years, the renovation cost increased by 40%, and it’s likely only to continue to rise in the short-term. Further issues with the UK supply chain in both material supply and labour, initially caused by Brexit and COVID-19 have been exacerbated by the war in Ukraine.
As property prices go into an upward spiral, homeowners might consider renovating their current home instead of buying a new one. According to a new report, homeowners are set to spend £217 billion on home renovations between 2022 and 2024.
The report, published by the European Home Improvement Association, states that the UK is among the most active home renovators in Europe, with 55% of households carrying out home improvement projects every year. The report also found that three in ten homeowners in the UK plan to carry out home improvements in the next six months.
With delays on refurbishment projects and increased labour costs, there is a requirement for finance to cover the shortfalls.
Depending on the size of the renovation project either Bridging or Development finance might be suitable, eliminating the monetary obstacle standing between you and your property renovations. With interest rates as low as 0.44% and flexible term options between 3 and 24 months, applying for a development finance loan can provide the funding required to achieve the property renovations whilst managing the increasing costs.
How we can help you with financing for property refurbishment or renovation
With our large network of specialist lenders who focus on finance for refurbishment, renovation projects and property development, we can arrange the finance needed to aid in heavy or light renovation projects, building costs and ground-up development. Our team is here to help you, book a call with one of our specialists to get your renovation started quickly.