Thousands of homeowners are dipping into savings, extending mortgages and relying on credit to pay for essential home repairs according to new research from the HomeOwners Alliance (HOA) and the Federation of Master Builders (FMB).
The survey of more than 1,200 homeowners found that 65% have used savings or investments to fund building work, while almost a quarter (24%) have turned to borrowing or credit to cover the cost of keeping their homes safe and habitable.
The research suggests that many homeowners are facing difficult financial decisions as they tackle necessary repairs rather than discretionary home improvements.
More than a quarter (27%) said they were upgrading key systems such as electrics, plumbing or heating, while 24% were dealing with structural damage or wider disrepair issues.
ROGUE BUILDERS
Among homeowners with a mortgage, financial pressures appear particularly acute. Some 14% said they had increased their mortgage borrowing or remortgaged to fund work, while 10% relied on credit cards, 9% used supplier finance and 5% took out personal loans.
Just 24% of homeowners said they were able to fund building work entirely from their regular household income.
The findings also highlight the potentially devastating consequences of poor workmanship. One homeowner from Scotland said money saved over 18 years to fund their child’s university education had instead been spent repairing damage caused by a rogue builder.
The homeowner says: “Due to a rogue builder leaving our home in a state of disrepair we have had to employ new contractors at significant financial and emotional cost to ourselves. The repercussions of this mean our child is unable to attend the university of his choice as funds that were allocated to their education that we have been saving for 18 years have had to be used to repair our home.”
FINANCIAL RISKS
Brian Berry, Chief Executive of the Federation of Master Builders, warned that many households were taking significant financial risks to fund essential repairs.
He says: “Homeowners are stretching themselves financially to make their homes safe – raiding pension pots, maxing out credit cards, and piling on more mortgage debt.
“These aren’t luxury kitchen extensions. People are fixing dodgy electrics and crumbling walls because they have no choice.”
Paula Higgins (main picture, inset), Chief Executive of HomeOwners Alliance, says: “Homeowners are doing the responsible thing by maintaining their properties, but many are stretching themselves financially amid rising mortgage costs, higher living expenses and stagnant wages.
“When people put this much on the line, the risk of being ripped off or left with substandard work becomes even more serious.”
