Setting the scene: renovation bills are rising
Home renovation is no longer a “nice to have” purchase for many UK households. It is often the most practical way to create space, improve energy efficiency, or make a home safer without moving. But the price tag has moved quickly. Industry reporting shows the cost of renovating an average three-bedroom home has risen by over 20% in the last two years. That change matters for any UK business selling big-ticket home improvement work, because more customers now need a realistic way to spread the cost.
For 2026, typical project benchmarks help put customer budgets into context: new kitchens are often £10,000+; bathrooms around £6,000; garage conversions average about £14,250; damp repairs can run up to £16,000; extensions frequently land around £40,000-£60,000; and loft conversions can range widely, roughly £27,500-£75,000 depending on complexity and location.
When costs move faster than wages, “pay upfront” stops being the default. Finance becomes part of how customers decide, not just how they pay.
If you are considering offering finance, the goal is not to encourage borrowing. It is to make affordability clearer, comparisons easier, and decisions more informed, so customers can choose the right scope of work and the right payment route for their situation.
Who this is designed to help
This is for UK businesses that quote for, supply, or install home renovation work and want to offer customers a compliant, transparent way to pay over time. That includes builders and renovation firms, kitchen and bathroom showrooms, solar and heating installers, damp and roofing specialists, and property improvement retailers.
It is also relevant if you serve landlords, property investors, or buyers of “unmortgageable” homes needing repairs before a standard mortgage is possible. In those cases, short-term options like bridging finance can be part of the conversation, provided you handle it carefully and signpost customers to specialist advice rather than steering them toward unsuitable borrowing.
What it means to “offer finance” (in plain English)
Offering finance means giving customers a way to spread the cost of renovation through a credit product, typically provided by a lender, not funded from your own cashflow. In practice, you are either introducing a lender’s product at the point of sale or directing customers to compare options themselves.
The main routes customers use in the UK tend to map to project size and urgency:
- For smaller jobs up to around £5,000 (for example decorating, minor repairs, window replacements), an unsecured personal loan is often cheaper than a credit card. A UK example comparison shows a best loan rate for £5,000 around 6.9% versus 8.9% on credit cards, saving roughly £177 in interest over three years (£532 vs £709).
- For mid-sized upgrades, unsecured home improvement loans can be a straightforward fit. Some lenders market “home improvement” products from £1,000 to £35,000 over 2 to 7 years, with representative APRs around 6.7% for typical borrowing bands (eligibility and offered rate depend on circumstances).
- For larger projects (often £25,000+ such as major kitchen reworks, extensions, or structural changes), customers may need secured borrowing, because unsecured limits and affordability rules can cap what is available.
- For time-sensitive purchases or properties that are not currently mortgageable due to condition, bridging loans are commonly used. These are specialist, short-term products and are typically arranged through brokers who can access more lenders and terms.
The key point: “offering finance” should mean helping customers understand choices and costs, not pushing them toward debt.
How to set it up without creating confusion or complaints
A good finance offering starts with clarity: match the product pathway to the customer’s project and keep the decision with them. One practical approach is to build your quotes around three numbers: the cash price, the deposit (if any), and an estimated monthly cost range based on realistic terms, while making it clear that final rates depend on lender checks.
Operationally, focus on a clean customer journey.
- Use eligibility tools where possible, because many lenders let customers check likelihood of approval without harming their credit score. That helps customers explore options early, before they commit to a scope of works.
- Be transparent about who the lender is and what you are (and are not) doing. If you are not authorised to give financial advice, do not present recommendations as advice. Provide information, comparisons, and signposting.
- Align finance options to typical UK renovation budgets for 2026. If a customer wants a £40,000-£60,000 extension, do not lead with a £10,000 unsecured loan. If they want a £6,000 bathroom, do not default to secured lending.
- Prepare your team with simple scripts that avoid jargon and avoid pressure. Customers should always be reminded to consider total repayable, not just the monthly figure.
The safest approach is: explain the product, the costs, and the risks, then let the customer choose at their pace.
Finally, set expectations on timing. Unsecured loans can be quick. Bridging and secured borrowing can take longer, require more documents, and may involve valuation and legal steps.
Why offering finance can help, if you do it responsibly
Finance can remove the “all or nothing” barrier that stops good projects going ahead. With renovation costs up materially in a short period, customers increasingly need a funding plan even for common upgrades. When you support that conversation responsibly, you help customers make realistic decisions about scope, phasing, and affordability.
It can also protect customer outcomes. For example, some homeowners avoid remortgaging because they do not want the hassle, the uncertainty of a new mortgage rate, or the risk of resetting their mortgage term. In those cases, a personal loan can provide upfront funds with fixed repayments, without securing the debt on the home. Major high-street lenders offer fixed-rate personal loans with terms commonly between 2 and 7 years, which many customers find easier to budget for.
For larger budgets, finance can be the difference between doing the job properly or cutting corners. However, it is vital to be upfront about the trade-offs. Secured borrowing may unlock bigger amounts, but it can put the customer’s home at risk if repayments are not met. Remortgaging to raise funds can materially change monthly payments. One February 2026-style scenario shows that adding substantial borrowing could increase monthly costs significantly, so affordability checks are not a formality - they are the core of responsible lending.
If you treat finance as a tool for clarity and control, not a sales lever, it can build trust and reduce disputes.
Pros and cons for customers (and what it means for you)
| Option | Best for | Typical amounts | Speed | Key benefits | Key downsides and risks |
|---|---|---|---|---|---|
| Unsecured personal loan | Smaller to mid projects (for example £5,000-£25,000) | Often up to £25,000-£35,000 (lender-dependent) | Often fast | Fixed repayments, no charge on the home, can be cheaper than credit cards for small jobs | Rates vary by credit profile; missed payments harm credit; total repayable can be high if APR is high |
| “Home improvement” personal loans | Mid-size upgrades (bathrooms, solar, repairs) | Commonly £1,000-£35,000 | Fast to moderate | Clear terms and set monthly costs; eligibility criteria are usually easy to explain (UK resident, income, credit checks) | Representative APR is not guaranteed; early settlement rules vary |
| Member-based personal loans (for example building societies) | Customers who already have membership | Up to £50,000 (product-dependent) | Moderate | Predictable fixed costs and longer terms available at higher amounts | Must meet membership and underwriting rules; rates depend on circumstances |
| Secured loan / second charge | Larger renovations often £25,000+ | Can be higher than unsecured | Slower | Higher borrowing potential, longer terms can reduce monthly payments | Home is at risk if repayments are missed; fees and charges can apply |
| Remortgage / additional borrowing | Very large projects where customer has equity | Often £50,000+ | Slow | Potentially lower rates than unsecured borrowing | Can increase monthly payments substantially; may extend term; fees and affordability checks |
| Bridging loan (often via broker) | Unmortgageable properties, urgent works, short-term funding | Often £50,000 to multi-million (case-dependent) | Can be fast with the right documents | Enables purchase and renovation before refinance; specialists can source terms | Higher cost, short-term, fees apply; exit strategy is essential; best arranged with specialist broker support |
Things to watch: compliance, affordability, and customer outcomes
If you offer finance at the point of sale, the biggest risks are not just operational, they are trust-related. Customers can feel pressured, misunderstand the product, or fixate on the monthly payment rather than the total cost. That is how complaints start.
Keep these practical checks front and centre. First, make affordability the headline, not approval. Encourage customers to sense-check repayments against their budget and to keep an emergency buffer. Second, talk about credit impact honestly: applying for credit can leave a footprint, but many lenders offer eligibility checks that do not affect credit scores, which is often a sensible first step.
Third, be careful with secured borrowing. For £25,000+ projects, secured loans, remortgaging, or equity release may come up. Customers must understand that secured finance is linked to their home and missed payments can lead to serious consequences. Equity release is typically only relevant for customers aged 55+ and has long-term implications, even if repayments are not required until the home is sold or long-term care is needed.
Finally, bridging finance needs extra care. It can be appropriate for properties that are currently unmortgageable due to condition, but it is not “quick money” to gloss over a budget gap. Customers should understand the rate structure (often expressed monthly), fees, and most importantly the exit plan, such as sale or refinancing once works are complete.
If a customer cannot clearly explain how they will repay or refinance, the finance option is not ready.
Other routes customers may prefer
- Pay in stages from savings, matched to project milestones.
- 0% purchase credit (where available) for smaller materials-only spending, if cleared within the promotional period.
- Using an unsecured personal loan instead of a credit card for smaller projects, where the loan APR is lower.
- Remortgaging or additional borrowing for larger works, where the customer wants to consolidate borrowing (noting fees and payment changes).
- A secured loan for £25,000+ renovations where unsecured borrowing is not sufficient and the customer understands the home-risk trade-off.
- Equity release (55+) for customers who meet eligibility and are comfortable with the long-term cost.
- Bridging finance for unmortgageable properties with a clear exit strategy, typically arranged via a specialist broker.
FAQs businesses and customers ask most often
Use realistic UK benchmarks to avoid underfunding. Common figures include: kitchens £10,000+; bathrooms around £6,000; garage conversions around £14,250; damp repairs up to £16,000; extensions often £40,000-£60,000; loft conversions roughly £27,500-£75,000 depending on scope.
When is a personal loan better than a credit card for home improvements?
For many customers funding up to about £5,000, a personal loan can be cheaper than carrying a balance on a credit card. A UK comparison example shows 6.9% on a £5,000 loan versus 8.9% on a credit card, saving about £177 in interest over three years.
When do customers typically need secured borrowing?
As a rule of thumb, once projects reach £25,000+ (for example major kitchen renovations, structural work, or extensions), customers may hit limits on unsecured lending and look at secured loans or remortgaging. These require careful affordability checks and clear explanation of the home-risk.
What eligibility rules do lenders usually apply for home improvement loans?
Many UK lenders require customers to be 18+ (sometimes 21+), UK resident, with stable income and a reasonable credit history. Some lenders specify a minimum income and several years of UK residency. Customers can often use eligibility checkers to gauge likelihood of acceptance without impacting their credit score.
What about customers renovating an unmortgageable property?
Bridging finance can be used to buy or renovate a property that cannot yet get a standard mortgage due to condition. Because bridging is short-term and can be costly, customers should normally speak to a specialist broker and have a clear exit plan such as refinance after works or sale.
Can we advertise a “from” APR or monthly rate?
You can share factual examples, but be careful. Representative rates are not guaranteed for every customer. Always present total repayable, highlight that rates depend on circumstances, and avoid implying acceptance is assured.
Should we recommend a specific lender?
If you are not authorised to give financial advice, do not present recommendations as personalised advice. You can explain options, provide comparisons, and encourage customers to check eligibility and read lender terms.
How Switcha can help your business
Switcha is a UK price comparison website. We help you and your customers compare finance options in a clear, plain-English way, so decisions are based on total cost, key terms, and eligibility, not guesswork. That can be especially useful when renovation costs are high and rising, from £6,000 bathrooms to £40,000-£60,000 extensions or larger loft conversions. By encouraging customers to compare like-for-like and use eligibility tools where available, you can support more confident purchasing without relying on pressure or unclear finance claims.
Disclaimer
This article is for general information only and does not constitute financial, legal, or tax advice. Finance products, rates, eligibility criteria, and availability can change and depend on individual circumstances and credit checks. Always read the lender’s terms, consider affordability carefully, and seek independent advice if you are unsure, especially for secured lending, remortgaging, equity release, or bridging finance.
