People are increasingly borrowing to make home improvements, suggesting that homeowners feel confident enough to invest in thier properties.
Using borrowed cash to make home improvements was particularly popular last year, though credit consolidation was the most common reason to borrow money.
The data, from Pure Property Finance, found there’s been 21% increase in average secured loan sizes in three years. Home improvements are a common reason to use secured loans.
Tom Rowlands, specialist property finance broker at Pure Property Finance, said: “The stabilisation, and more recently the reduction, of interest rates by the Bank of England has helped improve affordability and encouraged borrowers to take a longer-term view when accessing finance.
“This means they’ve been able to borrow more, paying slightly less interest and finally make any big home improvements or house purchases that they’ve been putting off for the last few years.”
In 2024 buying properties at auction was common, while in 2023 borrowing was primarily driven by investment purchases.
Rowlands added: “What we’ve seen over the last few years is a clear shift in mindset. Clients aren’t just borrowing to push ahead at all costs anymore.
“In 2024 especially, a lot of conversations were about stabilising finances, consolidating debt and protecting existing assets.
“More recently, we’re seeing cautious confidence return. People are still price-conscious and risk-aware, but they’re starting to think strategically again, whether that’s improving their home, refinancing more efficiently or taking advantage of opportunities where value exists.
“Speed and clarity have become just as important as price. Clients want to know where they stand quickly, and they expect a smoother, more joined-up process. That’s driven big changes in how brokers, lenders and partners operate.”