Brits borrow to invest in home improvements
Britons are continuing to invest heavily in their homes despite continued reports of challenging economic conditions, according to Sainsbury's Finance. Analysis of the supermarket bank's loans data suggests that homeowners are spending more on home improvements and investing more in their property.
Analysis of Sainsbury's loans book shows that one in five personal loans (21.0%) are taken out solely to pay for home improvements. The figures show a slight increase from 2010 (20.8%) and a significantly higher figure than the 14.1 per cent of personal loans taken out for home improvements in 2007.
Home improvements accounted for 20.2 per cent of the total value of personal loans taken out in the UK, again showing a slight increase from the 20.1 per cent of the total value last year. The average value of a personal loan taken out for home improvements has decreased slightly, from £8,827 in 2010 to £8,318.
Sainsbury's Finance is currently offering Sainsbury's shoppers with a Nectar card a competitive rate of 6.7% APR Representative on personal loans of between £7,500 and £14,999, when taken over a payment term of three years or less. Sainsbury's shoppers with a Nectar card can also choose the Reward option which also has a competitive rate of 7.1% APR Representative (if taken over three years) and the benefit of double Nectar points for two years plus a £40 Sainsbury's gift card. The additional Nectar points together with the base Nectar points mean customers could benefit from the equivalent to 2% off their Sainsbury's shopping and fuel for two years.
Sainsbury's Finance estimates that in 2010, the total value of personal loans taken out across the UK for home improvements alone was almost £3.2 billion and says it is likely to be a similar figure this year if the current trend continues.
Steven Baillie, Head of Loans at Sainsbury's Finance said: "Our analysis suggests that UK homeowners are continuing to spend money on home improvements and the average spend is marginally more than last year. The decision to invest more in their homes could be due to a number of reasons, perhaps some are aiming to increase the value of their home, or maybe others have been unable to move up the property ladder so are improving their existing home until they can do so.
"For those thinking of applying for a personal loan, whether it be for home improvements or another purpose, it's imperative that they shop around to get the best rate as it could save them a considerable amount in repayments. The repayment terms can also differ depending on which provider you choose, and you should also look into any other possible benefits that are available to you."