The number of people taking out home improvement loans has risen by 16 per cent in the last year, and the average amount borrowed is up by almost a third (30 per cent), from £15,500 to £20,000, according to new research from Abbey National.

The increase, however, may be less indicative of the UK’s obsession with DIY, and more to do with the cost of upgrading your property by making it larger – as a quarter of the loans taken out are spent on creating more rooms.

The average home improvement loan size of £20,000 is well below the average difference in price between a two-bed flat and a three-bed property of £27,4502 - and that’s before taking into account stamp duty and other moving costs. So some may find it more affordable to improve or extend their existing home to gain the extra space desired.

Indeed, with the average jump in price from a three-bed semi-detached home to a four-bed detached property being as high as £191,5602 , in many cases, the cost of moving is simply too much of a stretch.

Of Abbey National borrowers taking out a home improvement loan, the percentage split is as follows:

Guy Aldwinckle, Head of Mortgage Marketing at Abbey National said:

“The number and size of the home improvement loans taken out suggest that in many cases, expanding your existing home can represent a more affordable option than trading up to a bigger property.”

“Adding a conservatory, loft conversion or extension is also the best way of increasing the value of your home, compared with cosmetic improvements such as a landscaped garden or swimming pool, which are unlikely to ever recoup the investment made.”