Surge In Home Improvement Loans Reported

Fri, 13 Feb 2009

More UK homeowners are taking out loans for home improvements, despite the on-going financial downturn, new research has revealed.

According to estimates from Sainsburys Finance, around 425,000 loans worth over £4 billion were taken out in 2008, solely to cover the cost of such work – a year-on-year increase of 24 per cent in volume and 22 per cent in value.

In addition, the lender estimates that 1.1 million loans worth £11.3 billion were taken out last year partially or wholly to cover home improvements, representing a 53 per cent rise on loans taken out the same purpose during 2007.

Steven Baillie, head of loans at Sainsbury’s Finance, believes the increase in loan applications suggest homeowners are looking to stay put and make the most of their existing homes .

He added that some may be seeking to boost the value of their properties in a bid to cash in on them when the housing market starts to recover.

However, such homeowners may have to wait a while for their strategy to pay off, as several market analysts have predicted a fall in UK house prices of around 15 per cent this year, in addition to the 15.9 per cent annual decline registered by Nationwide in December.
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