Many people are now avoiding trading up because of the prohibitive cost. Stamp duty of 9 per cent on houses valued at more than £500,000, along with rising interest rates, are making people think twice.

As one erstwhile house purchaser put it, it can be like paying £100,000 for a bedroom. For example, a house in last week's property supplement in Rathfarnham in Dublin had a guide price of £700,000 which would mean stamp duty of £63,000, a huge price to pay to simply trade up.

As a result many families are now choosing to build an extension or convert the attic. Extensions range from the quite small, enough to hold a new kitchen and perhaps a conservatory, to a fully fledged two-storey addition, perhaps housing another bedroom and bathroom. Attic conversions are also extremely popular.

Lenders are now targeting this market and many remortgages are for families who are building on. Competition is intensifying as more people realise they can take this opportunity to move lenders.

Some lenders will insist that you repay your original loan and take out the larger new loan with them - this avoids the problem of who holds the deeds. But some lenders will give you a top up loan even if the original loan remains with another lender. They simply take a second charge on the home.

Remember competition is so intense in the mortgage lending business that most lenders would prefer to offer you a deal than risk losing the business. But those with variable rate loans are in a much better position to negotiate as they have the potential to move their business. But even those with large, fixed rates can usually negotiate a reasonable deal.

Whether you go for a new lender or stay with the original there are a few basic criteria you need to satisfy to qualify for the top up loan.

In the past, you needed a reasonable repayment history and a good deal of equity in your home but in these days of easy credit repayments, having a loan to value ratio of under 90 per cent is often enough to secure a further loan.

Most customers opt to simply add the extra amount to their outstanding home loan and repay it over that period.

However, if the amount is reasonably small, it may make sense to repay it over a shorter time period or, indeed, to fix the amount. Most lenders will offer these options.

You can fix part of the loan and keep the rest variable. You can repay both in a monthly or other regular payment or you can opt for two separate repayment dates. The options are numerous.

Remember that there should not be any additional premium for any sort of top up loan as there was in the past.

Indeed, most lenders will offer a new loan at the rates of interest applicable to new borrowers, whereas others will charge the same rates as applies to existing borrowers.

Of course, getting a further advance usually means paying additional costs in the form of administration and valuation fees. Most lenders will demand an upto-date valuer's report. This will generally cost about £60, although many people are already hiring an architect to oversee the work and this can be part of that service.

Borrowers should also remember that their building insurance and life assurance will also both need to be changed following the renovations.

Of course, if you have recently taken out a large loan, it may be more difficult to secure funding through your lender. And some lenders will only offer the facility to those seeking £10,000 or more. Others may need to apply for a home improvement loan.

Another option, which is mainly used by those who are mostly non-PAYE, is to take out a second charge loan from a bank. This will mean a slightly higher rate of interest, but it should still be less than the rates applying to personal loans. Personal loans are the most expensive, with interest rates often as high as 11 per cent or 12 per cent, the repayment periods tend to be short and early repayments usually incur a penalty.

The one option which should usually be avoided is a home improvement loan from a kitchen or bathroom company. These usually charge very high rates of interest, despite seemingly attractive deals which may be on offer.