Home improvement nightmare – what to do when you run out of cash

Buying a property that needs renovating can be a great way of adding value and improving the quality of your home’s living space.

And even if it’s ready to move in, it’s always nice to add your own stamp by getting stuck into some home improvements.

However, research by Zoopla warns that 25% of home improvements are left incomplete. Despite all your planning, unexpected issues like structural problems, a change to the original design or poor workmanship can force a project to run over time and budget.

How to prioritise incomplete work

Running out of money before you’ve finished your home improvements can be disastrous, especially if you are left with an unsafe and incomplete space. If this has happened to you, it is important to make a list of all the remaining work that needs to be done so you can work out what it will cost. Try prioritising the jobs that must be done over those that can wait, like decorating.

For example, if your kitchen is finished apart from some tiling and paintwork, you may be comfortable living with it as it is for now. As long as it can be used, you can put up with it not looking great while you save up to finish the work. On the other hand, a partly fitted kitchen with incomplete electrics, plumbing or with no appliances or white goods is unusable and you may need to get the money you need together quickly to finish it.

How to fund an unfinished project

Once you have prioritised the unfinished work and worked out a new budget, you will need to consider how you’ll pay for everything. If you used up your savings to start the work, you may be considering whether borrowing is an option.

Credit card

A credit card could help you fund those essential finishing touches. If you can, be sure to clear your balance each month to avoid paying interest, or look for a card with a longer interest-free period so you can spread your repayments. Always set up a standing order to make at least your minimum repayment so you don’t have to worry about missing this, and don’t spend over your limit. If you think the project will cost more than your spending limit, a different form of credit might be more suitable.

One benefit of using a credit card is Section 75, which means any purchases you make over £100 are covered by the credit card company and retailer. This means if something goes wrong with your purchase and you can’t get a refund from the seller, you can apply to your lender for one.

Homeowner loan

A secured or homeowner loan can provide you with a large chunk of money to finish your project off with. Because you’re borrowing a large sum of money, the repayments on home improvement loans will be over a long term.

Think carefully if you are considering this type of loan to fund the completion of your home improvement work, especially if you are only just managing to cover your mortgage payments. This type of loan is secured against your home, so it will be at risk of repossession if you default.

Avoiding extra costs – tips for future projects

If you’re planning a home improvement project, it’s a good idea to get professional advice when you work out what needs doing and the budget so you’re at less risk of running out of cash. An architect or a project manager will add to the cost, but can also help steer your project.

If you plan to run the project yourself, create a detailed list of all the work you need done and any materials or equipment you’ll need to pay for. This list will give you a good idea of the final cost – although it’s wise to have extra in case of emergencies.