As the pace of economic recovery quickens and house prices rise, many homeowners are facing the dilemma: move or improve?
Research by Populus for AA Financial Services shows that a third of those borrowing money this year intend to use it for home improvements.1 The research, released during Home Improvement Month, shows that four out of ten want to make changes to their home this year.2
Decorating is the most popular change – which one in five would like to do – while one in fourteen wants to revamp the garden. These improvements are at the cheaper end of the scale. One in seven intends to make a more costly change such as installing a new kitchen, or building an extension or conservatory.
Mark Huggins, director of AA Financial Services, said: "Improving a home is something a lot of people want to do but often can't because they don't have the funds available. Extensive work, such as building an extension, could take a long time to save up for, which is why credit tends to be a popular option for such projects.
Personal loan rates are at an all-time low,3 prompting a rise in loan applications, which many say is to do up their home. "Rates are typically lowest for personal loans of £7,500 and above," Mr Huggins points out.
"Credit cards – particularly those which offer a money transfer facility – can also be a useful way to pay tradesmen, as they have added protection in case anything goes wrong.
"Although carrying out home improvements can initially be expensive, the homeowner is likely to benefit in the longer term as the changes may well add value to the property and make it more attractive to potential buyers."
Under 35s are most likely to borrow money to pay for home improvements.
Top home-related desires for 2014
1 Research by Populus among 1,777 adults aged 18+, 16 December 2013 to 5 January 2014.
2 Research by Populus among 1,806 adults aged 18+, 28 November to 5 December 2013.
1 April 2014