The number of consumers considering personal loans has fallen by a quarter (24%), according to new research by MoneySuperMarket.
Figures analysed by the price comparison website show that as pandemic restrictions near their end, the home improvement trend might have peaked.
The boom in home improvements under lockdown and loan interest underlines this but between Q1 2020 and Q1 2021, home loan interest actually dipped by 8% having peaked in Q3 2020.
Interest in loans for big-ticket items such as cars and weddings dropped as the uncertainty caused by the pandemic started to kick in. Car loan interest has fallen for three consecutive years, showing a modest decline of 1.5% between Q1 2019 and Q1 2020, followed by a more substantial 15% drop between Q1 2020 and Q1 2021. Interest in wedding loans decreased by 54% in the same period.
With holidays directly impacted by travel restrictions, interest in holiday loans fell significantly by 76% year on year. However, data suggests that holiday loans are starting to recover, with enquiries expected to have grown by nearly a quarter by the end of Q2 2021, up 24% on Q1.
The average of age of prospective borrowers is 35, while the average loan amount is £10,000 for a period of 48 months.
Sasha Evans, Money Expert at MoneySuperMarket, said “The last 18 months have had a profound impact on the financial behaviour of many consumers and the take up of loans provides an interesting reflection of this.”
“Some behaviours were forced. For example, it comes as no surprise that interest in loans for big-ticket items such as cars has fallen, with driving levels low for much of the preceding year as a result of lockdown restrictions.”
“Likewise, holiday loans – which typically generate consistent borrowing year-round – dropped significantly because of the imposed travel limitations. With holiday restrictions now gradually being to ease, we are seeing growing numbers of Brits looking at holiday loans once again.”
“Interest in home improvement loans, on the other hand, did see a major boom with more Brits spending time at home and finally taking on all those odd jobs that they’d never had the time to do. However, home loans are now appearing to slow down as we return to normality.”