Homeowners choose extending over moving
15 July 2003
The number of people taking out home improvement loans has risen by 16 per cent in the last year, according to Abbey National.
The company's latest research also shows that the average amount borrowed has rocketed by almost a third (30 per cent) from £15,500 to £20,000.
However, the results of the study are less indicative of a new craze for DIY and more to do with expanding properties, as a quarter of the loans taken out were spent on creating more rooms.
The average home improvement loan of £20,000 is well below the average £27,450 difference in price between a two-bed flat and a three-bed property.
Abbey National also points out that the difference in price comes before taking into account stamp duty and other moving costs.
Indeed, with the average jump in price from a three-bed semi-detached home to a four-bed detached property being as high as £191,560, in many cases, the cost of moving is simply too much of a stretch.
Guy Aldwinckle, Head of Mortgage Marketing at Abbey National said: "The number and size of the home improvement loans taken out suggest that in many cases, expanding your existing home can represent a more affordable option than trading up to a bigger property.
"Adding a conservatory, loft conversion or extension is also the best way of increasing the value of your home, compared with cosmetic improvements such as a landscaped garden or swimming pool, which are unlikely to ever recoup the investment made."