Home Improvements Increase

Proof that homeowners are resorting to improving their homes rather than moving out of them has been given today in the form of statistics by Sainsbury’s Finance. The past year has seen house prices dropping at a rate not seen since the early 90’s and the amount of home sales grinding to a halt leaving homeowners in a difficult situation if they need to sell, particularly as the availability of mortgage deals is low. As a result, many people are improving the homes that they currently live in either to better their living standards or as a means to improve the value of their homes in the hope that the property market will take an upturn.

The findings by Sainsbury’s Finance reveal that during 2008, 425,000 people took out personal loans to be specifically used on home improvements; amounting to a total of £4 billion. Furthermore, the total amount of loans that were taken out to either totally or partially fund home improvements totalled around £11.8 billion. This accounts for 1.1 million homes in the UK and is a 53% increase on the amount of people taking out loans for the purpose of home improvements in 2007.

The head of loans at Sainsbury’s Finance, Steven Baillie explained the reason behind this surge in home improvement, saying: “It is well-documented that the housing market struggled last year and our figures might suggest that people have decided to stay put and make the most of their existing homes.”

The significant increase in people taking out loans for home improvements demonstrates a growing trend which sees people improving their homes rather than moving. However, it is not necessarily the perfect situation for many people in the UK who need to sell property fast and with home prices continuing to fall, the efforts of homeowners to make their homes more appealing to a prospective buyer may be in vain.

Rising costs for homeowners such as the continually high levels of energy prices are cause for concern, with many people struggling to meet payments for their mortgages as well as essential bills. Some of the UK’s largest energy companies have been very unclear about whether they will reduce energy prices and when reductions might happen. The burden of expensive bills alongside mortgage payments is for many families, one that is impossible to bear, leaving them in a difficult financial situation.