A report from Sainsbury's Finance estimated that approximately 425,000 loans were taken out during 2008 for the purpose of home improvement which is an increase of 53% from the previous year.

This is an interesting statistic that demonstrates the changing attitudes of consumers since the credit crunch kicked in and mortgages became more and more difficult to obtain. Rather than letting the feelings of dissatisfaction with their current home lead to them moving to another one, people are now improving the current home instead.

If we look at a typical example and analyse the costs, it is easy to see why some people may be tempted.

Let's assume a current home to sell valued at £250,000, and a new home you wish to purchase valued at £300,000. (Perhaps a nicer location or larger property).

The costs to moving could involve the following:

Estate agents fee @ 2% of sale price = £5,000
Home information pack = £400
Stamp duty on purchase @ 3% = £9,000
Solicitors fees = £1,000
Valuation fee = £500
Mortgage lender product/arrangement fee = £1000
Moving costs = £400

Total £17,300

That is a total of over £17,000 in costs to move house, not to mention the stresses and strains involved. With this combined with the difficulty in obtaining a mortgage, it's easy to see why some individuals would rather improve their current home rather than find a new one.

You can obtain a home improvement loan at reasonably competitive rates by securing it against your property in a similar manner to your mortgage. This can be done either via a further advance on your current mortgage, by increasing the loan size when you remortgage or by obtaining a secured second charge loan. Any of these options could allow you to create the feel of a new home while avoiding the hassle and costs of actually moving, and also increase the value of your home.