The Lloyds TSB Personal Loans service has found that the effects of the credit crunch on the housing sector is taking a toll on those consumers who are seeking to sell their homes. The fact that house prices are falling and first-time buyers are finding it difficult to obtain mortgages is forcing potential property sellers to remove their homes from the market and opt for using personal loans to carry out home improvements projects. Householders are adopting these measures in order to increase the equity in their homes.

The Bank stated that during the previous ten years homeowners were able to rely on the fact that a rise in property prices would increase the value of their homes. However, the current market conditions means that this is no longer the case.

Industry experts have warned that property owners should think carefully before they choose to embark on an expensive home improvement project. It is worth noting that these projects should also be protected by adequate insurance. As an added note of caution - there is little point in committing to domestic improvements if they do not add to the value of your home.