Home improvement loans can help out

Homeowners may find taking out a loan to help them improve the value of their existing property a cheaper way of making a profit than buying and selling properties from scratch, the Finance & Leasing Association's head of public affairs Edward Simpson has said.

Anecdotal evidence suggests that rising house prices are driving more homeowners to invest in improving their property courtesy of borrowed credit instead of buying new properties to renovate and sell on, Mr Simpson remarked.

Whether homeowners are just 'touching up' a property already within their personal 'property portfolio' or building complete extensions to enhance its value, borrowing to spruce up an existing property is "a much cheaper option" than buying new properties in the current housing market climate, he commented.

Taking out a loan with home improvements in mind is "very much an investment", he affirmed.

A recent survey from the Mortgage Advice Bureau showed that many first-time buyers taking out a 100 per cent plus mortgage are borrowing more than the cost of their property with the express intention of ploughing the loan into refurbishing or refitting their home.


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