Can't move? Then watch this space ...

... Get your sums right and it might soon be filled by a conservatory or even a new house

Remortgaging is more popular than ever as an increasing number of home owners, worried by the uncertainty surrounding house prices, make improvements to the property they've got rather than move somewhere bigger.

While tiling the bathroom is the biggest home improvement some will consider, others have grander aspirations to do a loft conversion or build a conservatory. The more ambitious the project, though, the greater the cost. As you are likely to need to borrow some cash to pay for the work, careful financial planning is necessary beforehand.

"One of the reasons remortgaging is hitting such heights is that, rather than go through the palaver of moving house and paying stamp duty and agents' fees, home owners are choosing to stay put," says David Hollingworth at mortgage broker London & Country. "Remortgaging is a cheap way of financing any improvements or renovations."

According to the Council of Mortgage Lenders, remortgaging accounted for more than half of all new home loans in January, or £9.6bn in gross advances.

There are plenty of cheap deals around as interest rates are so low. Mr Hollingworth recommends Coventry Building Society's two-year discount of 2.21 per cent, giving a current pay rate of 3.44 per cent. There is a £325 arrangement fee but valuation and legal fees are waived.

London & Country is offering its own deal, funded by Bristol & West. The rate is fixed at 3.75 per cent until April 2005 and there are no arrangement, valuation or legal fees.

The alternative is to take out a personal loan to cover building costs. But with even the cheapest lender (Lombard Direct) charging 6.7 per cent interest, you will get a better deal remortgaging. The key is to ensure you are comfortable with the increased loan repayments.

The very brave and ambitious might take building work a step further and construct their own home from scratch. Some 85 per cent of people surveyed by Norwich & Peterborough Building Society last year revealed that they have considered having a house built to their own specifications. But the number who act on this dream is likely to be much lower, given the scale of the task.

If you are considering self-build, coming up with a budget and sticking to it is as important as finding the right plot of land and gaining planning permission. Buying the plot will blow a big hole in the budget and you still have to pay an architect to draw up your plans – and ensure that you can afford their vision.

"The main complaint among self-builders is that plans drawn up are not buildable for the initial budget – something that often does not come to light until the quotations start coming in," warns Mark Brinkley at Homebuilding & Renovating magazine.

Remortgaging your existing property to fund a new one is unlikely to be feasible as you may well need to sell your home and rent while the building work is carried out. There are plenty of self-build home loans available, through such lenders as Nationwide and Britannia, though most advance just 75 per cent of the total amount.

A self-build mortgage will enable you to buy the land but you may be required to complete the next stage, such as the foundations, before more cash is released. "This can come as quite a surprise to self-builders, and they might have to raise some extra capital," says Mr Hollingworth.

The National Homebuilding & Renovating Show is at Birmingham's NEC, 13-16 March, 10am-5pm. For free tickets, go to www.homebuildingshow. co.uk/national_f.html

Tips for self-building and renovating

Set your budget. Have a definitive sum in mind and add 10 per cent as a contingency.

Find a plot. Sign up with a local estate agency or use a land-finding service such as www.plotfinder.net.

Design. Finding the right architect with relevant experience is important. Interview a few and look at examples of their work.

Planning permission. Your design must fit into the landscape.

Materials. You might be excited about choosing the roof tiles, floor coverings and window frames, but the choice can be daunting. Leave plenty of time for this.

Get quotes. A quantity surveyor should be employed to price the work. Get three quotes for each piece of sub-contracted work.

Working with sub-contractors. Set out a schedule and do your best to keep to it while being prepared to be flexible. There will be problems with the weather and with suppliers letting you down. Keep contractors informed.

Quality control. Be on site as much as you can so decisions are made without costly delays.