Modern homeowners spend a greater amount on home and garden improvements in recent times than at any point in the last decade, as the home improvement market soars to £11.3 billion, with an even higher projected growth in the coming years.
Behind these numbers sits a shift in how households are paying for the renovations, with new funding options and routes opening up for homeowners, making it much easier for individuals to carry out these processes and enhance their living spaces.
Here’s why the majority of people are turning to second charge mortgages and how one can plan a project that holds its value.
Key Takeaways
- Stamp duty, mortgage rates, and limited housing supply have made the cost of trading up significantly more painful than it was five years ago.
- Indoors, kitchens dominate higher-end spending, with kitchen renovation spending priced at around £17,500, with major rebuilds even going higher than this.
- Remortgaging used to be the default answer for larger projects, but it shifted in 2023 when many fixed-rate deals signed during the low-rate era began rolling off.
- Kitchens and extensions typically add somewhere between 5% and 15% to property value, depending on quality and local market conditions.
Why Renovating is Winning Over Moving
Stamp duty, mortgage rates, and limited housing supply have made the cost of trading up significantly more painful than it was five years ago. The result is that a sizeable share of UK homeowners are now choosing to stay put and improve, rather than list and move.
Industry data drawing on Häfele UK’s Homes for Living survey shows interior decorating (29%) and new kitchens (23%) topping the list of planned 2025 projects, with garden landscaping in second place overall at 21%. Outdoor dining and entertaining areas now feature in roughly one in ten planned projects.
For most of these households, the conversation has moved on from “should we improve” to “how do we pay for it.”
Project budgets are placed at the higher end of the scale, including full kitchen reconstructions, extensions, garden upgrades, and energy retrofits, sitting well beyond what most people can afford from their savings without uncomfortable consequences.
Where the Money is Actually Going
Garden and outdoor work have overtaken almost every other category in growth terms. Patio installation using standard materials averages around £5,800 across the latest projects, with premium natural stone selections running even higher.
Comprehensive landscaping plans for medium-sized gardens also average approximately £9,400 recently.
Indoors, kitchens still dominate higher-end spending, with median kitchen renovation spending priced at around £17,500, with major rebuilds even going higher than this.
Bathrooms usually sit between £8,100 and £20,000, depending on the amount of changes. Full house refurbishment projects cost between £48,000 and £78,000, with three-bedroom renovations reaching £75,000 to £120,000 if structural work is also required.
The numbers explain why so many households are looking past traditional unsecured borrowing.
A £40,000 garden redesign or single-storey extension simply will not fit inside a credit card or personal loan limit, and even where it might, the cost of servicing that debt over a short term tends to be punishing.
The Funding Routes Most Homeowners Consider First
Cash savings remain the first stop, as industry reports indicate that 17% of households looking for home improvements expect to spend between £5,001 and £10,000.
That figure resonates reasonably well with what most people can manage to afford from a rainy-day fund without delving deep into their emergency reserves.
Beyond that band, the pictures change drastically. Personal loans usually max out somewhere between £25,000 and £35,000 with the most competitive lenders, structured over five to seven years at rates that have just gone up since the last five years.
Credit cards rarely make sense for anything beyond cosmetic improvements, given the interest rates they involve.
Remortgaging used to be the default answer for larger projects, but the maths shifted in 2023 when many fixed-rate deals signed during the low-rate era began rolling off.
Households sitting on a 1.5% to 2% fixed rate have a real disincentive to refinance the whole mortgage just to release equity, because doing so means losing a deal they may never see again at the same pricing.
Why a Growing Number are Turning to Second Charge Mortgages
A second charge mortgage, sometimes called a homeowner loan, sits behind the existing mortgage and runs alongside it. The borrower keeps their original deal entirely intact and takes a separate secured loan against the equity in the property. For households on a low fixed rate, that distinction is the main reason these products have moved back into the mainstream conversation.
Gary Hemming, Commercial Lending Director at ABC Finance, told us, “Most homeowners assume they have to choose between giving up their current mortgage deal and finding the money another way. A second charge lets you do neither. You keep the rate you’ve locked in and borrow against the equity that has built up around it.”
Fun Fact
Professionals highly recommend adding a 10% to 15% contingency fund to your budget for “hidden horrors,” like asbestos, rotting joists, or outdated wiring.
Loan sizes typically run from £10,000 up to £500,000 for residential cases, with terms structured to match what is left on the existing mortgage. Rates currently sit at around 7% for borrowers with good credit, depending on loan-to-value. Broker fees vary widely across the market, with some still charging up to 12.5% of the loan amount. Funds can clear in one to four weeks, sometimes faster, where the lender accepts a desktop valuation.
The second charge mortgage market in the UK is regulated by the Financial Conduct Authority, which means borrowers receive the same affordability assessments and disclosures expected on any residential mortgage product.
What to Weigh Before Borrowing Against Your Home
Secured borrowing is not a soft option. The property is the collateral, and missed payments carry consequences that a personal loan does not. Anyone considering a second-charge product should sit with three questions before applying.
- Firstly, how comfortable the repayment appears across the full term, including stress-tested rate rises.
- Second, whether the new loan carries early repayment charges, and how those interact with any plans to sell or remortgage in the next few years.
- Third, whether the project itself is genuinely value-additive, or whether the spending is driven more by aesthetic momentum than long-term return.
On that final point, garden landscaping consistently ranks near the top of return-on-investment categories for UK homes, with industry estimates putting recovery near 80% at resale on well-designed schemes.
Kitchens and extensions typically add somewhere between 5% and 15% to property value, depending on quality and local market conditions.
Planning a Project That Holds Its Value
The biggest mistake households make on six-figure renovation budgets has nothing to do with finance. It is scope drift on site, where decisions made after steelwork is fixed or kitchens are ordered become significantly more expensive to reverse than the same decisions made on paper.
Specifying the work properly, getting fixed quotes where possible, and leaving meaningful contingency in the budget tend to matter more to the outcome than shaving fractions off a rate. The same logic applies to garden projects: getting drainage, levels, and access right at the design stage saves multiples of the cost later.
For households that have run their numbers, decided to stay rather than move, and need a way to fund work that exceeds what unsecured products can offer, secured borrowing has quietly become the route that makes the most financial sense in 2026.
The market has matured under FCA oversight, and the rate gap between first and second charge products has narrowed enough to make the trade-offs worth taking seriously.
FAQs
Q1) Why is it not feasible for homeowners to pay directly from their savings for renovations?
Ans: It is not feasible as the prices for everything have only increased in recent times, with many expenses going way above what people usually keep even for emergency purposes.
Q2) What are the things that should be considered when looking for a second charge product?
Ans: The following are the things that must be considered:
- Firstly, how comfortable the repayment appears across the full term
- Second, whether the new loan carries early repayment charges
- Third, whether the project itself is genuinely value-additive
Q3) What is a second-charge mortgage?
Ans: A second charge mortgage, sometimes called a homeowner loan, sits behind the existing mortgage and runs alongside it. The borrower keeps their original deal intact and takes a separate loan against the equity in the property.
Q4) What’s the most common funding route that homeowners consider?
Ans: Cash savings remain the first stop, as industry reports indicate that 17% of households looking for home improvements expect to spend between £5,001 and £10,000.
