May saw a sharp increase in the number of people remortgaging and borrowing extra funds, suggesting that many are choosing to improve their homes rather than move.
There were 21,370 new remortgages with additional borrowing in May 2019, trade body UK Finance said, nearly 20% more than in the same month in 2018.
The average additional amount borrowed by those remortgaging in May was £52,000. A further 19,650 people remortgaged in May without borrowing anything extra.
In contrast, the number of people taking out homemover mortgages in May fell by 1.2% to 29,430.
There were 30,720 new first-time buyer mortgages completed in May, 0.5% more than in the same month last year. Buy to let numbers also remained steady in May, with 5,500 buy to let purchase mortgages completed, the same number as in May last year. Buy to let remortgage numbers were up slightly by 2% to 15,000.
Is staying put cheaper?
Steep house prices combined with high stamp duty and moving costs mean that staying put and improving your home can be a cheaper alternative to moving.
Research earlier this year by Post Office Money found that homeowners added an average of £40,000 to their properties’ values by doing home improvements in the past five years, with an average spend of £14,015.
In total homeowners have spent £295bn making home improvements to their properties since 2014, with garden landscaping and adding an extension among the changes that add the most value.
Chrysanthy Pispinis, of Post Office Money said: “Over the past few years, house price growth has slowed, so homeowners have turned to other options to add value to their homes – with renovations being a clear opportunity.
“Making the right changes to your home can increase its market value significantly; if improving your home’s asking price is your priority, it’s important to keep in mind the cost of the improvement and the value it could add.”
Are you improving rather than moving?