A growing number of UK homeowners are choosing to renovate their existing homes rather than move, claims Pepper Money.
It claims there’s been a marked increase in the use of secured loans to fund home improvements. Faced with high mortgage rates, steep relocation costs, and limited housing supply, homeowners are finding smarter ways to adapt their homes for changing needs — driving a national trend towards “improve, don’t move.”
Monthly UK online search demand for “Home Improvement” rose by 19% last quarter, with more than 76,000 searches recorded in April 2025 alone.
According to Pepper Money’s customer data, it is revealed that home improvement loans now account for 9.7% of all borrowing, making them the second most popular reason for taking out a loan in the UK. The average loan value for home improvements was £33,795.
Birmingham (13.4%), Sheffield (9.5%), and Cardiff (9.1%) are leading the way in demand, as rising house prices and economic pressures push homeowners to invest in their current properties rather than relocate.
It’s no surprise that London leads the way in cost of home improvement borrowing, with an average loan size of £61,867. Higher property values in the capital mean homeowners are more willing — and often need — to invest significant sums to enhance their homes, whether through loft conversions, extensions, or major refurbishments.
Brighton (£44,548) and Manchester (£43,322) follow closely behind, reflecting the ongoing trend in high-demand urban areas where moving costs are prohibitive and improving an existing property often makes better financial sense. In these cities, where house prices have remained resilient and space is at a premium, investing in a home upgrade can offer a smarter route to long-term value growth.
| UK City | Home Improvements Loans | Average Loan Amount (£) |
| Birmingham | 13.4% | 30,147 |
| Sheffield | 9.5% | 23,190 |
| Cardiff | 9.1% | 27,875 |
| Nottingham | 8.4% | 26,892 |
| Manchester | 7.8% | 43,322 |
| Leicester | 7.6% | 30,892 |
| Newcastle upon Tyne | 7.4% | 27,006 |
| Glasgow | 6.8% | 28,562 |
| Bristol | 6.0% | 37,614 |
| Edinburgh | 5.3% | 35,808 |
| Liverpool | 5.1% | 19,667 |
| London | 4.9% | 61,867 |
| Brighton | 4.9% | 44,548 |
| Leeds | 3.8% | 35,738 |
Pepper Money adds that while projects like loft conversions can cost up to £75,000, they can add up to 20% to a home’s value—around £53,664, based on the UK’s average house price of £268,319. Other value-boosting projects include:
| Improvement | UK Monthly Search Demand | Average Cost | Estimated Value Added |
| Loft Conversion (with bedroom + bathroom) | 14,000 | £27,500 to £75,000 | Up to 20% |
| Single-Storey Rear Extension | 2,200 | £48,000 | 10–20% |
| Kitchen Renovation (Full) | 2,100 | £6,200 – £50,000 | 5–10% |
| Bathroom Renovation | 3,000 | £7,000 | 4–6% |
| Energy Efficiency Upgrades (e.g., insulation, heat pump, double glazing) | – | £10,000 – £15,000 | 5–10% |
| Garden Landscaping | 2,200 | £1,000 – £10,000 | 5–8% |
| Converting a Garage into Living Space | 5,700 | £10,000 – £20,000 | 10–15% |
| New Windows/Doors | 2,500 | £4,000 – £7,000 | 3–5% |
| Exterior Improvements (rendering, repainting, driveway) | – | £2,000 – £8,000 | 2–5% |
Homeowners are increasingly opting for secured loans as a way to fund large-scale projects without disturbing existing mortgage terms. Unlike unsecured personal loans, secured loans allow for borrowing up to £1 million with terms of up to 30 years, helping keep monthly payments manageable.
