70,000 home building projects cancelled each year due to funding lack
Published by Max Salsbury for 24dash.com in Housing and also in Development, Finance
renovationsImage: via Shutterstock
Thousands of Britons' plans for building or renovating their own homes fall through because of a lack of finance.
Up to 71,000 projects are cancelled each year as a result of customers not being able to secure funding, according to estimates from Experian CreditExpert.
Ahead of this year's National Homebuilding and Renovating Show, almost 300 exhibitors were surveyed to discover the impact that poor financial planning and credit management is having on contractors in this industry.
The survey discovered that:
• 57 percent of exhibitors have had problems with projects stalling because customers have been unable to secure financing - rising to 70 percent for projects costing more than £50,000;
• On average, contractors report 6.6 projects a year foundering for this reason;
• Of those projects which do encounter problems, 73 percent never go ahead as clients fail to secure funding for their project;
• On average 2½ days are invested in these projects before they stall at an average day rate of £76.91;
• With only a third of stalled projects ever coming to fruition, the average cost per exhibitor is £3,907.
Peter Turner, managing director at Experian Consumer Services, said: “The number of homebuild and renovation projects that are delayed or even cancelled due to customers not being able to secure financing is eye opening. However, including a credit health check as part of the budgeting process could help customers and contractors alike.
“As part of any project planning phase, we should all consider not only how much we want to spend on a project, but also how much we might need to finance with credit. If you might need to get a loan to help finance the project, doing a credit health check - reviewing your credit report and understanding if your credit rating is likely to secure any financing you might need, should be an essential part of the budgeting process.”
“If your credit rating is poorer than you would like, you will also then have time to work towards improving it, which will help you get the best interest rate for your financial situation. You and your contractors can then work together to plan a realistic budget and timeline to complete the project of your dreams.”