The Borrowers Keeping Home Improvement Aloft

Data from V12 Retail Finance suggests UK households are increasingly choosing to invest in their existing homes rather than move, with home improvement finance more than doubling in value in Q3 2026.

Finance values in the home improvement sector increased by 112% between July and September compared with the same period last year, making it the fastest-growing category across V12's lending portfolio.

The growth comes as high mortgage rates and moving costs continue to influence household decision making, with many consumers opting to renovate, extend and upgrade their homes instead.

Making life better

Overall, finance values across the V12 Retail Finance platform grew by 7% year-on-year in Q3, despite a challenging retail environment which saw prolonged hot weather and a busy sporting calendar impact shopping patterns during July.

Andrew Phillips, the MD of V12 Retail Finance, said: "The standout story of 2026 has been the continued investment households are making in their homes. Consumers are still spending, however they're being selective and focusing on purchases that improve everyday life and deliver long-term value.

"For many households, improving an existing property is becoming a more attractive option than moving. That's reflected in the significant growth we're seeing in home improvement finance and the continued strength of sectors linked to the home."

Helping HI retailers

The category's growth accelerated throughout the quarter, with finance values up 56% in July, 107% in August and 163% in September.

Home improvement (HI) finance has now almost quadrupled since Q3 2024 and accounts for around 7% of all finance provided through the V12 platform.

The growth was supported by V12's expanding retailer network, including the launch of its partnership with Magnet in July, alongside continued growth from specialist home improvement retailers across the UK.

Taking the finance option

Beyond home improvements, demand remained resilient across a number of practical spending categories.

Healthcare and dental finance increased by around 6% year-on-year, while consumer electrical finance more than doubled. Cycle finance grew by 24% and motor finance was also ahead of last year's levels.

Furniture remained V12's largest category, accounting for almost half of all finance values during the quarter.

Phillips added: "What we're seeing is a consumer who remains cautious about the wider economy but is still prepared to commit to larger purchases when they feel necessary or worthwhile.

"The breadth of growth across home improvements, healthcare and other practical categories gives us confidence as retailers head into the Christmas trading period."

Picture: Couples are happy to improve their homes.