Personal Loans Being Used to ‘Do Up’ Properties
A study carried out by Sainsbury’s Finance found that one in five personal loans were solely intended to be used for home improvements.
According to the group’s research, there has been almost no drop in the number of people taking out personal loans from 2009 levels. Between 2007 and last year there was a 47 per cent increase in the number of people taking out such loans for home improvement purposes.
Since the UK property market suffered near-collapse in the wake of the credit crunch in late 2007, Sainsbury’s Finance suggested that the increase of personal loans earmarked for home improvements could indicate that people are wary of moving home right now, and are prioritising making their existing home more habitable instead. It pointed out that back in 2007 only 14.1 per cent of unsecured personal loans were for home improvements, because people were more generally focused on buying and selling properties instead.
Sainsbury’s Finance head of loans Steven Baillie commented: “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.”
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