Several lenders have claimed an increase in the second charge loan market suggests economic uncertainty is causing more people to improve their current property rather than move.
Data shows there has been an 8.4% increase in people applying for second charge finance in the first quarter of 2021, when compared to the same time in 2020.
Figures also show that 51% of these second charges were applied for to make home improvements rather than sell to upgrade.
In addition, UK Finance has reported a 11% increase in re-mortgage applications in April 2021 compared to the same period last year. This is reinforced by the ONS reporting in their May House Price Index that the rate of increase in UK house prices is over 5%.
With an increase in re-mortgage applications, slump in the UK housing market and uncertainty around our economy due to covid-19 could suggest more people are choosing to improve their current properties – rather than take a potential financial risk of moving.
Growth in the market reinforces the fact there are plenty of opportunities in the current climate for second charges. It’s important to consider seconds as a solution for a refinancing or home improvement rather than just re-mortgage.
Key to this is to get professional assistance as borrowing money these days offers so many options and can be very confusing.
If you are looking to take out a new loan please do make contact and one of our independent advisers will be happy to assist.