Budgeting for Home Improvements | NatWest

Budgeting for home improvements

Things to think about when budgeting

Create your budget

If you're thinking of saving up to improve your home, don't forget to take the time to do your sums before starting work. It's important to consider the costs, legalities and how practical your plans are before you start knocking down walls.

The budget can be one of the most common areas where people fall short, often underestimating the time, effort and funds needed to finish the project. Aim to prepare for every eventuality when planning all types of home renovations and get organised before work starts, as you may save money in the long run.

Costs and budgeting

Whatever your plans are, make sure they're realistic – don’t overstretch yourself either financially or with a big project that you're not confident in managing.


Major home improvements can cost more than you expect, so it’s a good idea to create a budget and work out how you will pay for it. If you’re not sure if you can afford it, have a rethink and maybe scale down the project or consider doing it in stages.


Every home is different, so prices are difficult to predict without an inspection from an expert. As a general rule of thumb, single-storey extensions can cost upwards of £2,000 per square metre, and of that amount, you'll likely pay an extra 10% in fees for building regulations, a structural engineer and an architect. It's not unheard of to pay £10,000 for an extended kitchen, and a new bathroom could cost around £5,000. While new builds and self builds are free from VAT, extensions and conversions aren't, so that could be another expense you hadn't considered.


Things might not always go to plan, so set some money aside for emergencies. If you don't end up using it, you could use it to decorate that new space – or simply put it back into your savings.

Get the best deal

As with any big purchase, good research is crucial to secure a great deal. Try to get quotes from at least three different builders or tradesmen, and make sure to ask for references from previous clients.


Once you're happy with your choice, have the builder draw up a written agreement stipulating how long the renovation will take, with a breakdown of overheads.

Ensure you're adding value

In theory, renovation can be an easy way to add value to your home, but that doesn't necessarily mean what you spend will be reflected in the eventual sale price. A property's worth has a lot to do with location, transport links and various other factors.


Even if you’re not thinking about moving anytime soon, ask a local estate agent what your home could be valued at if you carry out your planned improvements or you could check what other similar properties in your area are worth on Zoopla.

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Getting the money together

If you’d love to renovate your home but aren’t sure about the best way to finance it, here are some options to point you in the right direction.

Savings or credit cards could come in handy

  • Credit cards give you up to 56 days’ interest-free credit as long as you always pay off your balance in full by the due date
  • Credit cards also give you additional consumer protection on anything you buy over £100

A personal loan might be the way to go for small – medium sized projects

  • They’re good value right now – with some lenders having particularly low rates at the moment
  • They’re flexible – some lenders allow you to pay off your borrowing over any terms you choose between 1 and 10 years
  • Check out quote tools, like ours, to find out how much you can borrow and how likely you are to be approved without affecting your credit score
  • It’s generally easy to apply and get your money
  • Just remember to check terms and APR rates to make sure you understand what you will pay back

Additional borrowing might be a longer term option

  • This means borrowing from your current lender, typically at a different rate to your main mortgage
  • Additional borrowing often works out cheaper per month than a personal loan, but you’d need to work out the figures as you could be paying it off over a longer period of time (so may pay more overall)
  • You could also look into remortgaging. This would mean borrowing a higher sum that covers both your existing mortgage and your renovation budget. But you’d need to factor in any fees or charges 

Take a look at our borrowing needs calculator to compare the features of different types of lending and which one might suit your needs.

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Useful links

Get your property deeds from the Land Registry


Find a rated tradesman for your job
Rated People 

Find local recommended tradesperson
Trust a trader 

Apply for planning permission
Planning Portal 


These links are to non-NatWest websites. NatWest is not liable for the accuracy of the information provided on these websites. 

Helping you plan

From budgeting to planning, our home improvements articles are here to help.

Read our tips and use our tools to help get your renovations underway.

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