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Repair now, pay later

Friday, March 27, 2009

Source: Catherine Deshayes

Homeowners facing common home emergencies have been forced to borrow money in order to fix problems with their properties, according to a new report by HomeServe...

The home repair and maintenance experts say that some 8.2 million homes experienced emergencies in the last three months, ranging from boiler breakdowns to burst pipes, leaking roofs, sewage problems and infestations.

According to HomeServe the effects of the recession are forcing people to ‘repair now, pay later' as some 14 per cent of affected homeowners - around one in seven - have had to borrow money to afford the repairs.

The HomeServe research shows that nine per cent of homeowners paid for repairs in the past three months on a credit card, racking up a cumulative credit card bill of some £167 million since the turn of the year. If unpaid in 12 months' time HomeServe says that could result in interest accruals of some £28.2 million.

The HomeServe figures also show that a further 400,000 homeowners - around five per cent of those with home emergencies - turned to bank loans, overdraft facilities or even borrowed money from friends and family to pay for problems caused in the past three months.

Jon Florsheim, CEO of HomeServe Membership, said, "The extreme weather conditions of the last three months have wreaked havoc on British homes. But the effects of the recession have caused their own problems, with millions of homeowners facing bills they cannot afford. For many the only option is to repair now, pay later - the alternative for many is living with a leaking roof, no central heating, or worse.

"Householders who are already feeling the pressure with tighter home budgets could face unexpected bills running into hundreds or thousands of pounds. One way to secure peace of mind and mitigate against the financial cost of urgent home repairs is to sign up for home emergency insurance, which will cover the cost of fixing the problem and ensure it is completed by an approved tradesperson."

The HomeServe report shows that one in 10 home emergencies costs over £400 to repair with five per cent of all emergencies caused in the past three months requiring homeowners to fork out over £1,000.

A third of homeowners were forced to draw on their savings to meet the cost of unexpected home emergencies.

Source: HomeServe