Will people be able to afford renovation costs?

The cost of living has rocketed for many people, what with higher utility bills, ridiculously expensive fuel, the rise in National Insurance contributions and higher food prices. Wages haven’t risen in line with these increases, and some families are really feeling the pinch at the moment. Even households with disposable income will see their ‘spare’ money dwindle.

This is what The Guardian has to say on the subject: ‘The cost of living crunch is eroding households’ spending power, at a rate that continues to confound central bankers. As energy, fuel and food prices march ahead of wages, there is a growing risk that this will bleed through to the housing market.’

There’s no doubt that the housing market is currently buoyant—more than buoyant, in fact, with new properties coming on the market and selling in seconds. However, less disposable income may mean some families can’t afford to move to a bigger house if they need more room. They will need to, instead, be creative with the space they already have, and maximise any opportunities for expansion/development of their current property.

room in a house covered with sheets, ready to be renovated

According to a survey by YouGov, a staggering 40% of adults admit that they’re just one pay packet away from homelessness.

What if you’d begun an extension or renovation of a customer’s house and one of the bill-payers lost their job?

Maybe you take a decent deposit upfront, to limit your risk in such an instance. Alternatively, you may have taken out ‘non-payment insurance’, which gives tradespeople some protection against this. Before you become disheartened, not every person will be out to swindle you; sometimes, however, life causes bad things to happen to good people.

It does raise the thought that, if prices and inflation continue to rise, home renovation projects may drop off, and become something only the wealthy can afford. The self-employed will already be charging higher prices to keep their own heads above water, following drastic rises in the cost of building materials and utilities. People in the UK, therefore, will be hoping that price rises in general will reach a natural ceiling, otherwise many more could be in trouble.

There’s better news on the financial front, in that it’s still relatively cheap for homeowners to lend the money they may need to complete that extension or loft conversion. This is good news for tradespeople, who will receive what they’re due without any issue of non-payment. Any change in the homeowners’ circumstances thereafter would only impact the bank in this scenario.

stacks of money indicating rising prices

To help people explore their options in relation to the development of their existing properties—rather than moving house to create extra space—permitted development rights were changed in 2020. The changes mean homeowners can add another couple of storeys to their (two-storey) homes, should they wish, as well as extending beyond the outer walls of their home…to a maximum of six metres if their home is semi-detached, or eight metres if it’s detached. These amendments to permitted development rights followed common changes to people’s working and living routines because of the pandemic. With remote working rising in popularity, some homeowners have had to eke out or create appropriate workspace in their homes, which, in some cases, was a prompt for an extension or other home development.

The housing market and the construction sector have both seen plenty of feast and famine—both have bounced back after recessions, lockdowns and other crises. The rising cost of living is a worry for many, but people will always need a suitable roof over their heads.