"With mortgage rates remaining high and moving costs continuing to rise, more homeowners are choosing to stay put and invest in upgrading their current homes rather than relocating"
- Ryan McGrath - Pepper Money
More UK homeowners are choosing to renovate their properties rather than move, as high mortgage rates and the rising cost of relocation make staying put more attractive. New data from Pepper Money has highlighted a significant increase in the use of secured loans to fund major home improvement projects in 2025.
Monthly searches for "home improvement" climbed 19% in the last quarter, with more than 76,000 recorded in April alone. The data reflects a broader shift towards adapting existing homes to suit evolving needs rather than entering a competitive and costly property market.
Cities leading the renovation trend
According to Pepper Money’s latest customer insights, loans for home improvements now make up 9.7% of all borrowing, making it the second most common reason for taking out a loan. The average loan for home upgrades currently stands at £33,795.
Birmingham (13.4%), Sheffield (9.5%), and Cardiff (9.1%) are among the UK cities with the highest share of home improvement loan applications. In these areas, rising property prices and ongoing affordability challenges are encouraging homeowners to improve rather than move.
Unsurprisingly, London leads the way in terms of loan size, with an average of £61,867 borrowed for home improvements. Higher house prices in the capital mean that renovations such as loft conversions and extensions often require greater investment.
Manchester (£43,322) and Brighton (£44,548) also feature prominently, reflecting trends in other high-demand cities where improving an existing home often makes better financial sense than entering the market as a buyer.
Why homeowners are staying put in 2025
Several factors are driving the trend towards renovation:
- Mortgage rates: Many homeowners are locked into favourable fixed-rate deals and are reluctant to give them up.
- Moving costs: Stamp duty, agent fees, and removal costs can add tens of thousands to the price of relocating.
- Lack of stock: In many cities, the right property simply isn’t available, prompting people to improve what they already own.
- Return on investment: Upgrades such as energy-efficient improvements or loft conversions can significantly boost a home’s value.
One standout figure shows that while a loft conversion may cost up to £75,000, it can add as much as 20% to a home’s value. Based on the UK average house price of £268,319, that equates to a gain of around £53,664.
Secured loans gaining traction
As demand for high-value renovation grows, more homeowners are turning to secured loans for funding. Unlike personal loans, secured loans allow borrowing up to £1 million, with repayment terms stretching up to 30 years. This flexibility means larger sums can be accessed without affecting existing mortgage agreements.
"With mortgage rates remaining high and moving costs continuing to rise, more homeowners are choosing to stay put and invest in upgrading their current homes rather than relocating," explained Ryan McGrath, director of secured loans at Pepper Money.
"At Pepper Money, we're seeing a growing number of customers taking out secured loans to fund major renovation projects, from loft conversions to energy efficiency upgrades, that add both comfort and value."
He added, "Choosing how to finance a home improvement project is an important decision. The right approach can not only transform your living space but could also boost the value of your property. Whether it's through remortgaging, taking out a loan, or using savings, it's vital to find a solution that fits your financial goals and circumstances. Speaking with a mortgage broker or financial adviser can help you navigate the best path forward."
"Depending on your situation, a secured loan may enable you to borrow anything from £5,000 to £1m, with repayment terms of 3 to 30 years, which means you can minimise your monthly repayments, with the amount available based on factors like your credit history, financial situation, and property equity."
