Householders “are borrowing for home improvements”

Homeowners are continuing to invest in their properties with a fifth of personal loans in the first half of 2010 spent on home improvements, according to a supermarket bank.

Sainsbury’s Finance says Britons are spending money on their homes despite continued reports of challenging economic conditions and a possible double-dip recession.

It reports that, in the first half of 2010, one in five personal loans was taken out solely to pay for home improvements – with the figures showing almost no decline from 2009.

It also came up with the following figures following analysis of its loans data and market share:

  • A 47 per cent increase between 2007 and 2009 in the number of people using loans for home improvements purposes alone.
  • Home improvements accounting for 19.5 per cent of the total value of personal loans taken out in the UK in the first six months of this year, showing no decline from the 19.4 per cent of the total value last year.
  • The average value of a personal loan taken out for home improvements going up by 12 per cent from £8,237 to £9,225 from 2009 to the first half of 2010.
  • The company estimates that in 2009 the total value of personal loans taken out across the UK for home improvements alone was more than £3.2 billion and says it is likely to see a similar figure this year if the current trend continues.

Steven Baillie, Head of Loans at Sainsbury’s said: “Some recent reports indicate that many Britons are delaying buying major items at the moment, but our figures indicate that when it comes to our homes, improving them is the exception, perhaps because despite increasing positivity in the housing market, many may still be choosing to improve rather than move.

“If people do decide that they need a loan to pay for their home improvements, they should make sure they look around for the best rates on the market, which could save them a considerable amount in repayments.

“For example, a saving of as much as up to £1,000 could be made on a loan of £10,000*, so there’s potential for perhaps more home improvements, or it could come in handy elsewhere. Ultimately, you must make sure you’re getting the best possible rate for your requirements and not paying over the odds, because you don’t have to.”