Finance for home improvements more than doubled in the third quarter of 2026, according to V12 Retail Finance, amid signs that households are prioritising renovations over moving home.

The lender reported a 112% year-on-year increase in the value of home improvement finance between July and September, making it the fastest-growing sector across its lending portfolio.

The figures suggest that the costs associated with moving, including mortgage borrowing and property transactions, are encouraging some homeowners to invest in upgrading their existing properties instead.

Growth in the category accelerated throughout the quarter, rising from 56% in July to 107% in August and 163% in September, compared with the corresponding months in 2025.

Home improvement finance has almost quadrupled in value since the third quarter of 2024 and now represents approximately 7% of all finance provided through the V12 platform.

HOME IMPROVEMENTS OUTPACE WIDER LENDING GROWTH

The increase was substantially ahead of V12’s overall performance, with total finance values across its platform rising by 7% year-on-year during the quarter.

The lender attributed part of the growth in home improvement lending to its expanding network of retail partners, including a new partnership with kitchen retailer Magnet, which began in July.

Andrew Phillips, managing director 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, but they’re being selective and focusing on purchases that improve everyday life and deliver long-term value.”

He added: “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.”

FURNITURE REMAINS LARGEST LENDING CATEGORY

Despite the rapid expansion of home improvement finance, furniture continued to account for the largest proportion of lending through V12, representing almost half of total finance values during the quarter.

Other categories also recorded year-on-year growth. Consumer electrical finance more than doubled, while cycle finance increased by 24% and healthcare and dental finance rose by approximately 6%.

Motor finance also exceeded the levels recorded in the corresponding quarter of 2025.

The overall increase came despite difficult conditions for retailers, with V12 identifying prolonged hot weather and a busy sporting calendar as factors affecting shopping activity during July.

Phillips said: “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 Black Friday and the Christmas trading period.”