Loans for home improvements accounted for 28% of all personal loans in 2012 with some 624,235 people using them to improve their homes in 2012, an increase of 22.8% year on year, the figures from Sainsbury’s Bank show.
This amounted to an estimated £5.6 billion of personal loans up from £4.49 billion, an increase that outpaces the increase in mortgage lending, which rose by just 1.4% in 2012, according to figures published by the Council of Mortgage Lenders.
In addition to an increase in the number of borrowers, the figures also show that the amount people are borrowing to improve their homes has also increased. In 2011, the average amount was £8,792, while in 2012 this rose 2.6%, or £233, to £9,024.
‘Our research shows that, year on year, more people are looking to invest in their property and carry out home improvements. As well as the obvious improvements to standard of living, home improvements can add real value to a property,’ said Steven Baillie, head of loans at Sainsbury’s Bank.
‘We'd encourage those planning work to shop around to ensure they see the best possible return on their investment. The personal loans market has become increasingly competitive, which is great news for those seeking a loan, so we'd encourage shopping around to ensure getting the best deal,’ he added.
The bank’s lowest ever rate is currently 5.1% APR on loans between £7,500 and £15,000. Customers also benefit from a personally tailored repayment period, from one to seven years, fixed repayments for the whole period of the loan and money transferred directly into a bank account.