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Fifth of homeowners use mortgage advance to go green

As energy bills are rising 22% of homeowners are using mortgage advances to improve the efficiency of their homes to reduce costs.

Two thirds of mortgage advances are used for home improvements and 22% of homeowners are improving home efficiency due to higher energy bills, according to Halifax.

Making your home more efficient with draft exclusion, loft insulation, double glazing and better underlay can give you an immediate benefit and reduce the cost of heating your home.

More expensive systems such as ground source heat pumps and solar panels can have significant long term financial and environmental benefits to homeowners.

For older homeowners you can release cash from your home with a lifetime mortgage and by adding a drawdown reserve, you can make energy efficiency improvements to your home over time.

Two thirds borrow to improve home

Of the agreed mortgage advances since 2020, two thirds are used for home improvements including buying consumer goods for general updates and making repairs.

Since the pandemic building material prices are up 35.6%, the cost of goods has increased along with supply chain issues and delays, making home improvements expensive.

There are different ways of raising extra money with 44% of people use their general savings for home improvements and 18% use some form of credit such as personal loans, credit cards or family and friends.

Most people spend less than £5,000 a year on improving their home although a quarter would pay more, and 10% are spending £100 to £500 per month on home maintenance.

The main reason given for improving homes for 65% of people is personal enjoyment, 22% for improving energy efficiency, 10% to help a family member, 9% to sell a home and 6% to add value.

You can use equity release to cover the cost of these improvements with an initial cash amount and a pre-agreed mortgage to drawdown cash over time for future projects, such as an extension.

There are barriers to making upgrades with 34% saying the cost of improvements, 25% said it was difficult to find the tradespeople and 14% said the increasing cost of materials.

For major improvements and structural work 38% said the regulations were confusing and difficult to navigate and 40% said they would not know where to begin.

What you need from a dream home

Rather than improve your current home, 56% of people would prefer to buy a new home with little or no work needed.

The most concern for buying were structural problems with 70% of people saying they would be put off buying if there were cracks, subsidence or major damp and mould.

Other reasons would put-off a buyer with 50% saying any roofing problems, 44% said re-wiring, 39% said having to remove a swimming pool, 37% said the need to build an extension and 33% said general re-modelling.

The cost of buying a dream home in retirement with none of these problems can be achieved with a lifetime mortgage where interest can roll-up so there are no monthly repayments.

Even if the dream home is more expensive, equity release can allow you to trade up with no need to to prove your income giving you the extra lump sum cash upfront to buy your home.

See how to how much you can access to buy your dream home by releasing an extra lump sum at this link:
Free equity release calculator with instant results to buy a dream home.

A third of people say their dream home is a large, modern detached house with all the modern facilities including kitchen/diners and walk-in wardrobes, good Wi-Fi connection and energy efficient.

About a quarter of people said they would like a Georgian, Edwardian or Victorian period property with high ceilings and large windows although the cost of heating would be higher.

What are your next steps?

Talk to our London City Mortgage advisers if you are thinking of trading up to buy a dream home as we have extensive experience at completing the lifetime mortgage.

Find out more about the best products and interest rates to consider when using a lump sum to trade up with this link:
Free equity release quote with interest rates to buy a new home.

Our expert advisers can find products to meet your objectives generating the lump sum you need for buying a dream home. Learn more by using the equity release calculator, property value tracker chart and mortgage costs calculator.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.


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