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More Britons Borrowing To Invest In Home Improvements

06 July 2011

Britons are continuing to invest heavily in their homes despite continued reports of challenging economic conditions, according to Sainsbury’s Finance. Analysis of the supermarket bank’s loans data suggests that homeowners are spending more on home improvements and investing more in their property.

Analysis of Sainsbury’s loans book shows that one in five personal loans (21.0%) are taken out solely to pay for home improvements. The figures show a slight increase from 2010 (20.8%) (1) and a significantly higher figure than the 14.1 per cent of personal loans taken out for home improvements in 2007.

Home improvements accounted for 20.2 per cent of the total value of personal loans taken out in the UK, again showing a slight increase from the 20.1 per cent of the total value last year(1) . The average value of a personal loan taken out for home improvements has decreased slightly, from £8,827 in 2010 to £8,318.

Sainsbury’s Finance is currently offering Sainsbury’s shoppers with a Nectar card a competitive rate of 6.7% APR Representative on personal loans of between £7,500 and £14,999, when taken over a payment term of three years or less(2) . Sainsbury’s shoppers with a Nectar card can also choose the Reward option which also has a competitive rate of 7.1% APR Representative (if taken over three years) and the benefit of double Nectar points for two years plus a £40 Sainsbury’s gift card(3) . The additional Nectar points together with the base Nectar points mean customers could benefit from the equivalent to 2% off their Sainsbury’s shopping and fuel for two years.

Sainsbury’s Finance estimates that in 2010, the total value of personal loans taken out across the UK for home improvements alone was almost £3.2 billion(3) and says it is likely to be a similar figure this year if the current trend continues.

Steven Baillie, Head of Loans at Sainsbury’s Finance said:“Our analysis suggests that UK homeowners are continuing to spend money on home improvements and the average spend is marginally more than last year. The decision to invest more in their homes could be due to a number of reasons, perhaps some are aiming to increase the value of their home, or maybe others have been unable to move up the property ladder so are improving their existing home until they can do so.

“For those thinking of applying for a personal loan, whether it be for home improvements or another purpose, it’s imperative that they shop around to get the best rate as it could save them a considerable amount in repayments. The repayment terms can also differ depending on which provider you choose, and you should also look into any other possible benefits that are available to you.”

Sainsbury’s Loans repayment example, borrowing £10,000 over five years:

Lender
APR Representative
60 monthly repayments of
Total amount repayable Savings over 60 months
Sainsbury’s Finance 6.8% £196.12 £11,767.20
Tesco Bank  7.4% £198.50 £11,910.00 £142.80
Post Office® 7.4% £198.76 £11,925.60 £158.40
Santander 7.4% £198.77 £11,926.20 £159.00
NatWest (Existing customers) 9.9% £209.92 £12,595.20 £828.00
The Co-operative Bank 9.9% £210.20 £12,612.00 £844.80

All figures based on £10,000 over 60 months. Competitor rates: source Moneyfacts.co.uk – the comparison site you can’t afford to ignore 17/06/11.

Competitors quoted may offer lower rates to existing customers, internet or telephone applications or for larger loans.

In addition to one of the most competitive rates in the marketplace, customers taking out the current online offer available with Sainsbury’s Finance Loan benefit from:

A personally tailored repayment period, from 1 to 7 years
Fixed repayments for the whole period of the loan
An instant decision
Money directly into your bank account
For further information on Sainsbury’s Finance Loans, call 0800 169 8502, log onto http://www.sainsburysbank.co.uk/   or pick up a leaflet in your Sainsbury’s supermarket.

– Ends –

For further information, please contact:

Ian Morris / Ewan Robertson
Citigate Dewe Rogerson
020 7282 1037 / 2981

Notes to editors:

(1) Analysis of Sainsbury’s Finance loans data
(2) Current offer is available to Sainsbury’s customers viawww.sainsburysfinance.co.uk until 7th July. A rate of 6.7% APR Representative applies if payment term is taken over three years or less. For customers opting for a longer payment term (applicable for a term of up to five years), a rate of 6.8% APR Representative will apply. Applicants must be Nectar cardholders and will have to supply their Nectar card number when applying for the loan. Full terms and conditions are available at www.sainsburysfinance.co.uk/
(3) Full terms and conditions for the offer are available atwww.sainsburysfinance.co.uk/
(4) Analysis of Sainsbury’s Finance loans data and its market share

Sainsbury’s Finance:

To view our latest press releases and product information, please visit the Sainsbury’s Finance online media centre atwww.sainsburysfinance.co.uk/media.

Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Finance provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times.  Our products consistently top Best Buy tables and regularly win awards for quality, price and service.

Sainsbury’s Finance recent awards include Best Overall Online Provider, Best Direct Personal Loans Provider, Best Online Credit Card Provider, Best Online Life Insurance Provider, Your Money 2010.

Sainsbury’s Finance is a joint venture between J.Sainsbury plc and Lloyds Banking Group.

For further information and general Sainsbury’s Finance enquiries customers can call the freephone number on 0500 40 50 60 or visit www.sainsburysfinance.co.uk/

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