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Homeowners 'adding value' with DIY

Whereas once they would have relaxed after finally getting a foot on the property ladder, first-time buyers are now looking to boost the value of their homes straightaway in order to move up the rungs, it has been claimed.

Neil Simpson of Thisismoney.co.uk has said that new property owners are increasingly using additional borrowing to fund value-enhancing home improvements, adding that the traditional method of borrowing extra on a mortgage may not be the best option.

Although research from Moneyextra.com yesterday revealed that Brits are remortgaging their homes to release more money than ever before, using a mortgage loan to pay for home improvements may soon become unpopular as the fees charged to extend an existing deal continue to increase, Mr Simpson states.

Extra mortgage borrowing can also be potentially hazardous as there is a chance the homeowner will "forget about the new debt", meaning that taking a personal loan could prove to be a much better choice.

"The monthly costs of a three or five-year personal loan can be much higher than a mortgage but the total repayment bill should be far lower which is why they are worth considering," said Anna Bowes of independent adviser AWD Chase de Vere.

Last month a survey by Moneysupermarket.com revealed that 45 per cent of the people who undertake home improvements do so to add value to their investment.

See how much you could borrow with a home improvement loan from Lombard Direct.

21/06/2007 17:05:57

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