Britain: Improvers or movers?

The latest research released by peer-to-peer consumer loans service, Zopa, has revealed that Brits are renovating their properties to create their dream home for the long-term.

Related topics:  At Home
Warren Lewis
6th June 2016
"Our nation’s homeowners can create their dream home now and build the future they want for themselves and their families"

According to the research, over two thirds (67%) of people undertaking renovations say they plan to stay in their property for five years or more.

Far from viewing their homes as just a financial investment, Brits are opting to create their dream home by investing in improvements to live in for longer, making the UK a nation of improvers not movers. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that only a quarter (27%) either have had or plan to get their home revalued after renovations, and less than one in ten (9%) said they would need to move to be in their ideal home.

So far in 2016, Zopa customers have borrowed over £50 million to improve their homes, a 54% increase on home improvement loans compared to the same period last year. The figures show that more and more people are choosing to use a Zopa loan to improve their most important asset: their home.

With personal loan rates at record low rates, an unsecured loan, currently offers one of the best value options for those looking to undertake a home improvement. Home improvers can spread their loan costs evenly over a number of years, and for the vast majority it can be much quicker than re-mortgaging which typically can take up to two months and can be a far cheaper option than using a credit card with typical purchase interest rates well above 20% APR when compared to a typical personal loan from Zopa that averages 8% APR and with an online process that takes under 2 days, Zopa's current loan rates start from 3.3% APR.

In line with latest ONS data suggesting more people are choosing to entertain at home, space to host family and friends is high up on the list for people’s ideal home. A third (34%) used their home improvement loan to revamp their kitchens and, of those who said their homes are not yet perfect, a fifth (19%) cited a bigger kitchen as top of their wish list. This reflects recent data from HMRC that suggests home transactions for April 2016 are down 14% compared to same month last years, highlighting that people are opting not to move and sell up.

Far from heading to the estate agents after renovations, two out of five people say they are now in their perfect home. Of those who still don’t think their property is perfect, only one in five (22%) said they would need to move. The most commonly cited areas for improvement were better décor (31%), bigger kitchens (19%) and more bedrooms (19%).

The research also found that the majority (73%) turned to the professionals to complete their home improvements, with almost half (45%) using skilled professionals for the entire job. Only just over one in ten (13%) undertook all the renovations themselves and the same number sourced help from family and friends.

This is despite the majority of people (86%) saying they would happily take on some form of renovation work. Unsurprisingly, over three quarters (77%) said they’d be happy to do painting, with half (51%) ready to take on wallpapering and a third happy to complete tiling (32%). People were least confident when it came to masonry work (6%), bricklaying (7%) and plastering (10%).

The good news is that 97% of people were satisfied with their renovations, and 40% even said they now live in their perfect home.

Jaidev Janardana, CEO of Zopa, said: “It’s positive to see that the majority of people are improving their homes to live in for the long term, rather than selling up and moving. Whilst renovating can seem pricey, it’s significantly less expensive and disruptive than moving house.  By choosing a personal loan over a lengthily re-mortgaging process or expensive credit card, consumers can spread the costs over a number of years through an affordable monthly repayment. This means our nation’s homeowners can create their dream home now and build the future they want for themselves and their families.”

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