Huge increase in 2nd charge lending

The number of second charge loans taken out in August was up by 103% year on year to 2,214, according to the latest statistics from the Finance and Leasing Association.

By value, second charge business was 118% higher compared to a year ago at £95m.

However, month-on-month, second charge lending was down 6% by value and 5% by volume from £101m and 2,433 loans in July.

Looking at the year to the end of August, the total value of loans was 1% higher than the previous 12 months at £956m.

The number of loans over the same period was 5% higher than the previous year at 22,880.

The second charge mortgage market continued its recovery from the pandemic in August. 

The market has reported more normal levels of new business in recent months which we expect to continue in the final quarter of 2021.

You need a quick turnaround.

It can take several weeks to organise a re-mortgage. If you require extra finance in a hurry, going for a second charge will be the quicker and cheaper option available to you.

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Need to know more? Please do contact us and one of our independent advisers will be happy to assist.

Economic uncertainty is driving the second charge market

Increases 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 8.9% increase in people applying for second charge finance in the second half 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.

In addition, reports show a 9.2% increase in re-mortgage applications in September compared to the same period last year.

With an increase in re-mortgage applications, slump in the UK housing market and uncertainty around our economy, this could suggest more people are choosing to improve their current properties – rather than take a potential financial risk of moving.

It could be that Covid-19 worries are flattening the property market, meaning fewer people are moving and more homeowners are making improvements to their current properties rather than move during a time when it is still unclear how Covid will affect property prices.

If you are looking to raise funds it’s important to consider a second charge as a solution for a refinancing or home improvement.

Like to know more?

Our independent advisers are fully trained and skilled in all areas of lending so please do contact us to discuss any requirements you may have.