Holiday homes are a great asset that allows you to go on inexpensive holidays or boost your income with rental payments. Renovating your properties will modernise them and increase their market value while improving your holiday experiences.
Below, we’ll cover the key factors to keep in mind when renovating a second property to help you make the right decisions.
Evaluating the Purpose of Your Second Home
Second homes can serve various purposes. You can keep it empty when you’re not on holiday or let your friends and family stay there when you’re not using it. Alternatively, you can use it for rental income and act as a landlord or make improvements for a future resale.
Understanding the primary purpose of the property will provide you with insights into the renovation choices you’ll make and the scope of your budget. A holiday let will need durable, easy-to-clean finishes while maintaining a modern decor to attract guests; meanwhile, you may want to lean into your personal taste if it’s a family retreat.
Budgeting for Renovation Costs
Typical UK renovation costs vary depending on the scope of the work. Installing a new kitchen, for example, typically costs between £10,000 and £20,000 on average, while full property renovations on a 3-bedroom house can exceed £50,000.
Labour, materials, and the location of your second property will all impact final costs, so setting a realistic budget is essential. Research the average prices in your area and get multiple quotes before making a decision. Make sure you prioritise essential work and include a contingency fund of 10–20% of your total budget to cover unexpected issues, such as structural repairs or hidden dampness.
Exploring Financing Options
There are several ways to fund your renovations with different eligibility criteria and repayment terms. Personal savings are a cost-effective option, without interest or repayments, giving you complete control over spending. However, using savings may limit your renovation scope or leave you without a financial cushion if you go overboard.
With remortgaging, you can release equity from your main or second home, often at competitive interest rates. You’ll need a strong credit profile and sufficient equity, but it can offer lower monthly repayments over an extended period. Keep in mind that it will extend your mortgage and can involve fees and early repayment charges.
If your credit is less than perfect, homeownership loans can be a good option, allowing you to borrow against the value of your property. They typically have fixed repayments over five to 25 years and can be arranged more quickly than remortgages but may have higher interest rates.
Navigating Planning Permissions and Picking Contractors
When renovating, you’ll need to secure planning permissions and comply with local building regulations. Without it, the work can be delayed and drive up costs or entangle you in legal issues that see you forced to reverse unauthorised work. Extensions and major structural changes usually require formal approval.
Hiring the right contractors is just as important. Look for a proven track record and numerous positive online reviews. Check their references and qualifications, and verify their memberships with trade bodies, such as TrustMark or FMB. Always obtain at least three quotes to compare pricing and scope of work to get the best deal.
