Renovating a house is a costly endeavour, both in time and money. But thankfully, there are things you can do to make your dream house that bit more achievable. Keep reading to learn how to save money for and on home renovations.
Due to varying levels of condition, work required, and day rates from contractors, it’s hard to say an exact figure when it comes to house renovations. However, it helps to set aside some money for each room of the house, even if it’s not on your list of priorities.
Life is full of unexpected surprises, so you never know when you’ll need to shift your priorities around to react to new problems or changes in preferences.
So, if you’re wondering how much to save for home renovations, a good guide to the cost can be found by accounting for 20-25% of your overall house cost. So, if your house was worth £180,000 when you bought it, your internal, non-critical renovations could cost anywhere from £36,000 to £45,000.
Again, this is only a rule of thumb, and the exact cost of your renovations will vary depending on the work needed. But, as a starting point, this is quite effective.
With your goal figure in mind, now comes the crucial part: putting money aside. Here are our top tips for saving towards a home renovation:
Getting your hands dirty is by far the best way of saving for and on your home renovations. Of course, there are some tasks, like changing a fuse box (consumer unit), for example, that do require specialist people with the necessary qualifications to undertake.
But, for other tasks like laying a laminate floor, installing garden decking, or replacing light sockets and switches, all that’s really needed is a bit of ambition and initiative. When doing things yourself, you’ll save on contractor day rates, which can vary greatly depending on average rates and availability. All that’s left to budget for then is the materials and tools.
While you may be reluctant to invest in tools, remember: you can use these again in the future, making them a worthwhile investment.
Material costs are by far the greatest expense when it comes to house renovations. Over the past few years, costs for things like timber frames and insulation materials have been growing substantially. So, it’s important to keep an eye out for bargains, bundles, and discounts on any materials you’ll need.
While this may add some delays to your renovations, the savings you can make may make up for this. Waiting a few weeks or months will slow down the rate at which you can renovate, but will help free up more cash to enable you to renovate more parts of the house.
Choosing a contractor to work on your home requires a lot of trust. You should feel confident that they’ll be able to meet your quality expectations in a timely and affordable manner.
Therefore, it’s a sensible step to shop around to find a tradesman you trust. Having work completed by someone who is under qualified can lead to further issues (and costs) down the road. We recommend taking a few extra minutes to vet your choices before starting work to reduce the risk of further problems in the future.
Remember, don’t just check online. Your close friends and family are sometimes even more reliable when it comes to sourcing the right person for the job. Plus, with this, you might even be able to check out the finished product in person rather than via a photo.
Like we’ve said before, owning a house comes with a certain degree of uncertainty. You can never be sure what room will need the most immediate action, or what problems truly lie beneath.
This all calls for prioritisation. Start by identifying which rooms or parts of your house need the most immediate attention, and budget your savings accordingly.
Structural alterations or amendments to your home are by far the most costly, both in time and money. So, you may wish to get those sorted before tackling some of the more aesthetic issues in your home like painting, flooring, and furniture.
Having a strong base that you can trust is almost always the best way to start saving for renovations. This includes things like architecture fees, plastering costs, damp-proofing measures – simply glossing over these may present further challenges in the future which you may not expect.
As with any major financial investment, it’s always a good idea to put some additional money aside to account for unexpected issues that arise.
Having a contingency plan in place in the shape of supplemental cash is a great boost for your peace of mind. If possible, you should save for this before commencing any work, as this will not only help you generate more interest on the savings in your account, but it’ll ensure that the money is available right away.
As for an exact amount of contingency, that’ll depend on the scale of your project and your ability to save. But, a good idea is to put aside 10% of your expected costs. If your unexpected costs are higher, you’ll at least have a healthy savings pool to tap into.
Your saving strategy, in particular the types of savings accounts that you have, can be vital when saving for house renovations.
It’s helpful to have a balance of both immediately accessible savings and slightly less accessible savings. The more accessible your savings are, the lower your interest rate tends to be. With long-term notice accounts, you get the benefit of higher interest rates, but it may take you longer to withdraw.
Using both of these accounts could help you maximise the amount you’re able to save for home renovations. Contingency funds can be stored in a notice account and (hopefully) not touched for a long time, building high interest; your overall renovation budget can be pooled into an easy access account for frequent withdrawals.
It’s not just your home that could do with an overhaul. Start taking more control of your savings portfolio by trusting Aldermore – an experienced savings provider to over one quarter of a million customers who trust Aldermore.
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* Based on Trustpilot Data May 2024
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