Lockdown led to a dramatic increase in requests for home improvement financing, according to a survey of second charge brokers.
81 per cent of brokers said that they have seen an increase in demand for loans to fund home refurbishment projects over the past six months.
The survey – commissioned by Shawbrook Bank – also found that 41 per cent of broker clients used financing to fund a redecoration project, while another 41 per cent used finance to fund an extension or loft conversion.
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Most broker clients have chosen to fund their refurbishments via a second charge mortgage. However, Shawbrook urged borrowers to consider other lending options as well, in order to secure the best rates.
“The past 18 months have required many of us to spend longer at home than we ever would have before,” said Gavin Seaholme, head of sales at Shawbrook Bank.
“With working, socialising and exercising all taking place within the same four walls it’s no surprise that people are looking to expand or make changes to their homes. While for many savings have gone up in lockdown, taking on a big renovation can quickly add up.
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“If your client is planning to undertake a refurbishment or extension, large or small, it’s important to discuss all of their finance options with them. A number of landlords and property investors continue to rely on personal loans or credit cards to finance their DIY projects, which can be a riskier and more expensive approach to take.
“Understanding your client’s aims for the project as well as their current financial position will all help to inform the pathway they choose.”
Almost nine in ten (87 per cent) of the second charge brokers surveyed by Shawbrook Bank said that they are feeling confident about the lending environment for the remainder of 2021, compared with just 30 per cent who were confident at the same time last year.