Surge in demand for home revamp loans

PROPERTY owners eager to upgrade the energy efficiency of their houses have caused a boom in home improvement loans, it has emerged.

There were almost 40,000 personal loans drawn down in the first three months of the year and the average value was almost €10,000, new figures show.

Banking & Payments Federation Ireland chief executive Brian Hayes said: ‘This latest report shows that in the first quarter of 2022 there was strong growth in personal lending with volumes and values up 36.4% and 32.9%, respectively, in yearon-year terms. Of note are the increases seen in the volumes of home improvement loans, which were up by 26%, and loans for education purposes, which jumped by 56%.’

He continued: ‘This is very much reflective of the fact that in the first quarter of 2021 the country was experiencing a lockdown, whereas 12 months later life has, for the most part, returned to normal, construction has resumed and education has returned to the classroom. And looking at car loans, where the first quarter of the year is a key period for new car sales, it’s interesting to see that car loans grew by 10.2% with the average car loan having increased by almost €400 to €11,285.’

Many of the home improvement loans are for upgrades to the energy efficiency of buildings and extensions as a lack of homes for sale means growing families need to extend to get extra room.

Construction Industry Federation chief Tom Parlon said homeowners are also upgrading older houses with extra insulation and heat pumps to improve their Building Energy Rating.

Owners can cut their rising fuel bills that way and also qualify for Sustainable Energy Authority of Ireland (SEAI) grants towards the cost of the work.

Personal loans drawn down in the first three months of the year were worth €384million – an average of €9,963 each.

The number of home improvement loans rose 26% year-on-year to 10,837, while the value rose 31% to €126million over the same period, which is €11,590 each on average. There were 11,901 car loans in the first three months of 2022, worth a total of €134million, the figures also showed.

The number of car loans was up 10% year-on-year as people looked to upgrade their vehicle after the pandemic.