sav­ings spend­ing the

More of us are im­prov­ing than mov­ing. But think about the costs...

The Wharf - - Property -

Home­own­ers are im­prov­ing rather than mov­ing. But many house-holds are raid­ing sav­ings to fund home im­prove­ments. And that could rip away their rainy-day funds com­fort blan­ket. In­sur­ance is not al­ways the so­lu­tion. It only pays out if there is a sud­den in­ci­dent such as a light­ning strike – it will not give a penny if the prob­lem is due to old brick­work let­ting in damp or a worn-out roof. Ac­cord­ing to AA Fi­nan­cial Ser­vices, the in­sur­ance arm of the road res­cue or­gan­i­sa­tion, the av­er­age UK house­hold spent £2,634 on home im­prove­ments from July to Septem­ber. But that fig­ure hides ev­ery­thing from £26 for a coat of paint to £26,000 and more for new kitchens, bath­rooms and bed­rooms. It adds up, the AA cal­cu­lates, to £71 bil­lion – with just un­der half funded from rainy day ac­counts. De­spite an in­ter­est rate rise, re­turns on sav­ings are still al­most in­vis­i­ble and be­low the rate that prices are ris­ing, so many house­holds reckon it’s bet­ter to spend than save and will worry about that rainy day when it hap­pens.

Scot­land has the high­est num­ber of sav­ings raiders – with 55 per cent of projects north of the bor­der fi­nanced this way.

But there are other ways of fund­ing home up­grades with­out raid­ing sav­ings or opt­ing for credit cards. Bor­row­ing from par­ents – the Bank of Mum and Dad, although some ask sis­ters and broth­ers – has over­taken for­mal loans with nearly one in five fi­nanc­ing ma­jor work with cash from the fam­ily.

Usu­ally, no in­ter­est is in­volved – and some­times, those lend­ing the money can be vague about re­pay­ment sched­ules. One pop­u­lar job at this time of year is win­ter­proof­ing the home.

Low cost tasks in­clude door and win­dow draught-proof­ing – of­ten just a roll of sticky-backed foam from a DIY store.

But there are still many homes where loft in­su­la­tion is non-ex­is­tent or in­ad­e­quate.

The av­er­age house­hold spent just over £2,000 on this. Some laid out on im­prove­ments to plumb­ing – these typ­i­cally in­volved £1,300 with Lon­don­ers most likely to up­grade wa­ter sys­tems, prob­a­bly due to the cap­i­tal hav­ing the old­est hous­ing amongst big UK cities. Alex Neill of Which?

In­su­la­tion and cen­tral heat­ing are worth­while hav­ing – but not cheap

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