A garden room is a significant investment and many readers ask us how people pay for them. The common options are from savings, by taking money on a mortgage or by engaging in a finance arrangement.
Particularly with the smaller garden rooms, many buyers use savings to pay for their building, and this is by far the most straightforward way of paying.
A garden room is a form of house extension and many people will add the cost of the room to their current mortgage, like you might with any other form of home improvement. This option has the benefit of spreading the cost over a long period.
Many garden room suppliers work with finance companies to offer funding for garden rooms. In these instances it’s not the supplier offering the finance; you will be dealing with a finance company and they will then pay the supplier.
Finance packages differ between companies and your circumstances, but the premise is like buying a car - you pay a deposit, then ‘x’ number of monthly payments and often a balancing payment at the end of the contract.
We are not financial experts so it’s not for us to advise which method is best for you. We suggest you talk with your financial adviser or accountant.
When do you pay for a garden room?
Most garden room suppliers ask for stage payments throughout the build:
Deposit payment - this can be anything up to 50% of the project cost.
Payment before delivery - your supplier may ask for payment before work starts on site. This can be anything up to 45% of the balance.
Final payment - once work is completed to your satisfaction the balancing payment is due.
Protecting your payments
As you are investing thousands, if not tens of thousands of pounds in this building, you will want to protect your payments. One way is to make payments on a credit card and then pay them off. When paying on a credit card, purchases between £100 and £30,000 are protected under Section 75. This means that if something goes wrong the Credit Card Company is equally liable. The Money Saving Expert offers a guide to this It’s worth talking to your Credit Card Company before you make the payment or seek advice from an independent network like the Citizens Advice Bureau.
The other option is to take out a deposit insurance policy. Many suppliers offer these, but it’s worth checking the small print as we have heard that there are limits on the amounts covered, and on expensive builds, the whole deposit amount is not covered.
If your supplier doesn’t offer a deposit insurance scheme or you want to explore more options, you may find that if you talk to an independent insurance broker that they can organise a policy to cover the deposits paid during the work.
You should also check as to who is paying the policy premium in these situations. In most cases, you will be liable for the premium in addition to the garden room, but some suppliers will cover the cost as part of the project cost.