A growing number of homeowners are using second charge mortgages, also known as secured loans, for home improvements.
Internal data from mortgage lender Pepper Homeloans found that people in Birmingham (13.4%), Sheffield (9.5%), and Cardiff (9.1%) are showing the strongest demand for second charges for home improvements — with an average loan value of £33,795.
Ryan McGrath, director of secured loans at Pepper Money, said: “With mortgage rates remaining high and moving costs continuing to rise, more homeowners are choosing to stay put and invest in upgrading their current homes rather than relocating.
“At Pepper Money, we’re seeing a growing number of customers taking out secured loans to fund major renovation projects — from loft conversions to energy efficiency upgrades — that add both comfort and value.”
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.