Homeowners across the UK are now borrowing more money from mortgage lenders than ever before to fund home improvements, according to new figures shared with City A.M. this morning.
According to mortgage broker Mojo Mortgages, the average amount of money being applied for by existing homeowners to fund renovation projects has increased by just over £13,000 (up 25 per cent) over the course of the pandemic – rising from an average of £52,209 in 2019 to £65,267 as of August 2021.
It’s not just the amount of money being borrowed per applicant that’s risen – the amount of people looking to borrow has also seen a significant uplift – with remortgage applications for home improvements up 174 per cent for the year so far (when compared to this time in 2019).
Experts believe there are several factors behind the rise in total applications and the amount of funds being applied for with record low mortgage rates alongside the rising costs of building materials and labour, as well as more ambitious projects creating the perfect storm for remortgage applications.
Cassie Stephenson, director of mortgages at Mojo Mortgages, said: “After such an uncertain 18 months you might have thought that purse strings would have tightened from both homeowners and lenders, however in many cases this has been the complete opposite.”
“With people spending more time in their homes than ever before, homeowners have had the time to imagine their dream property and the steps required to make this a reality as society opens up and returns to normality,” he said.
“Couple this with record low rates for remortgages – as low as 0.83% in some cases – and you can see why homeowners are looking to strike while costs are low. Of course, it’s important to consider all the fees involved and not to focus solely on rates when looking to get the best deal,” Stephenson concluded.