Second charge completions are at a new peak

A survey recently conducted has reported the fallout from Brexit and now Covid-19 has had little effect on the second charge lending market as 68% of loan applications resulted in an offer this financial year. This figure is 24% higher than the same period last year.

The proportion of offers that subsequently resulted in a completion also increased to 80% this year compared to 71% last year. Brokers also experienced a significant 3% jump in the number of second charge enquiries they received than last year.

Research also found that the Brexit outcome has not significantly affected the flow of customers through the overall second charge approvals process. It would seem the UK public have taken Brexit onboard and now dealing with Covid-19.

This form of lending is now hitting all the predicted levels from two years ago, as homeowners take advantage of the low loan rates on offer. The survey also stated importantly that borrowers much prefer this form of lending to the unsecured alternative.

A second charge loan is a serious alternative to a re-mortgage, with so many options open to the borrower it is highly recommended to seek professional advice. The lending market is a very confusing area for most borrowers so do seek advice from an independent broker as they will have access to all products available.

Can we help?

If you would like to know more about second charge lending and how it could assist you do make contact and one of our independent advisers will be happy to guide you.

Second charge and reducing debt

Paying off bills has become a major issue in the second charge market with three out of the top five broker-related searches cover debt enquiries or people with county court judgements, according to mortgage database Knowledge Bank.

This demonstrates that a number of people are struggling financially and are using their homes to secure debt against. The one constant in January was ‘Maximum loan to value’ which has been the top searched ‘second charge’ criteria since May 2019.”

Broker searches for furloughed workers hit the top spot in the residential market, for the first time since August 2020.

Independent brokers are working with an increasing number of clients on the job support scheme, who were potentially struggling to get a mortgage. This became increasingly difficult in January as lenders have continued to restrict criteria for those on furlough.

As we move into 2021, the mortgage market continues to shift dramatically. There is significant interest in debt consolidation in the second charge market, while the buy-to-let sector continues to attract interest from both potential and existing investors.

The furlough scheme is at the top of brokers requests in the residential category as thousands of families are, or have now been, affected by being on furlough. Just how supportive lenders will be of those that have been on the scheme is still being established.

Need some assistance?

If you think this type of loan could assist you in your future planning it is especially important to ensure you get the correct deal to suit your needs. There are many different lenders offering numerous second charge loans so please do call our advisers who will be happy to help you achieve the correct loan for you.

Energy price are going to increase

The news just broke that this spring many families’ household energy bills are set to rise by £96 per year. So we thought we would take a quick look at easy ways to make sure you’re getting a good energy deal…

Energy regulator Ofgem announced a sharp increase in bills for up to 15 million households on Friday as it lifted the price cap on energy by an average of £96 a year to £1,138.

The price cap – a limit on both the amount suppliers can bill for each unit of electricity or gas a consumer uses and on daily standing charges – applies to 11 million customers who are on “default tariffs”, meaning either they have never switched suppliers, or that their discount “fixed” deals have expired. 

The 4 million people on pre-payment meters -generally the poorest in the UK -would also see a sharp rise in bills, by £87 to £1,156.

The move – which will come into force from April 1 – returns the cap on prices to their levels before the pandemic. 

The regulator said it had taken the step because the wholesale cost of energy – which the suppliers pay – had returned to more normal levels after plunging during the Covid emergency. Emma Pinchbeck, the chief executive of Energy UK, a trade body for energy suppliers, said that the price cap is set in a way that is meant to be fair for both customers and suppliers.

The news of the price cap lifting immediately led to claims many households will struggle to make ends meet. 

Citizens Advice research in December 2020 indicated that 2.1 million households were behind on their energy bills – up 600,000 from pre-Covid levels.

Where do I go to switch energy provider?

Switching can take time but is often worth it to quit overpriced legacy tariffs. 

Try taking a look at comparison app USwitch – it bills itself as making the entire process less stressful by allowing you to manage all your providers and switch between them within the app.

It is also worth heading to Martin Lewis’ site allows you to compare energy tariffs. For example, it will allow you to see which provider is offering the cheapest green energy tariff. 

The site states that most people on standard tariffs could save around £200 per year by switching. Lewis has said he hopes the price cap – which he refers to as a “rate cap” – lifting will “shock some people into action” over their energy bills. Appearing on ITV last night, Lewis explained that consumers may make even greater savings than websites currently show once the cap is lifted from April. 

Price comparison website also offers to quote how much the site’s tech thinks your household should be paying.

Of course, do check out the regulator’s site first for official tips.