While it was one of the most successful months ever for us at Plastic Surgeon, July 2014 was noteworthy for another reason, and it had nothing to do with UK sporting success. RateSetter, the largest peer-to-peer (P2P) lender in the UK by monthly volume, saw a record £3,678,066 in lending for home repair and improvement, an increase of 46% on the previous July.
For your interest – and because I hadn’t heard of it before – P2P lending is whereby an unsecured personal loan is lent to individuals or ‘peers’ by companies on the basis of analysis of the borrower’s credit: these lenders mitigate risk by diversifying their investments among different borrowers. The lender’s investment in the loan is not protected by any government guarantee and doesn’t go through traditional institutions such as banks or building societies; transactions are undertaken online, which keeps overheads down, (and of course keeping costs down is something our repair service is all about though we have no idea how much of this investment may have been spent with us).
In 2013, the value of home improvement loans increased by a massive 189% year-on-year, to £26,384,017. Already in 2014, RateSetter has lent 3,296 home improvement loans at a value of £23,025,037 – with a main reason being that the cost of buying property in London is becoming increasingly unaffordable, thus the capital’s residents have taken out the most home improvement loans over the last year; followed by Glasgow and Birmingham.
Of course, the concept of ‘improve rather than move’ has been around since the recession hit, but while house prices in the UK have recovered steadily of late, many people simply cannot justify rising Stamp Duty costs either. We are also seeing an increase in multi-generational living, where young people cannot afford to buy, so stay with their parents. Meanwhile grandparents will often sell their homes to realize equity for their cash-strapped families, only to move in with their offspring.
As a result, people are adapting their homes; perhaps converting their garage into a granny annexe, or their loft space into a flat for stay at home students. With borrowing conditions imposed by the banks being almost punitive, it is not surprising that P2P is proving popular.
The surge in P2P and the RMI sector generally are being felt down the food chain, with the DIY outlets, trade contractors and Plastic Surgeon – as the country’s only national cosmetic repair specialist – reaping the rewards financially through offering the products and services homeowners need. What’s more, our repair techniques are increasingly being seen as the most economic option to obtain value for money. For example, to repair a gouge in the kitchen worktop is going to be more cost-effective than installing new: involving as it does ripping out the damaged one, purchasing a replacement surface, retiling, re-grouting and the rest.
With the major national housebuilders still flat out on sites in many of the regions, RMI booming and more than 20 of our Finishers lined up to help with the refit of a luxury liner, we could be looking at a new ‘best ever’ month for Plastic Surgeon very soon.