The previous high for January was four years ago, in 2009, where lending reached £53 million.
Secured loan lending in January was 20.9% above the same month in 2012, making it the fifteenth month in a row second charge borrowing climbed year-on-year.
January lending volume increased 22.9% on the £24.5 million written in the shorter working month of December.
Matt Tristram, joint managing director of Loans Warehouse, said: “The record January lending figure is welcome news in what is usually a weak first month for the secured loan sector. The results clearly illustrate the market is in healthy shape and we are yet to see the full impact of last month’s product changes.
“Homeowners have benefitted greatly from the effects of the changes from the secured loan lenders in recent weeks and when Shawbrook Bank announced an increase in its maximum loan to value to 95% last week, the industry applauded.
“When the housing market crashed in 2008, there was widespread withdrawal of high loan to-value products.
“This meant the high LTV mortgages previously on offer became a thing of the past, leaving millions of homeowners locked in, with little or no borrowing options.
“However, the LTV changes from Nemo and Shawbrook have provided these borrowers with options once again. Shawbrook’s 95% LTV plan is the highest offering by mainstream secured loan lenders since the start of the credit crunch. Furthermore, the recent figures from the FLA, which revealed that repossession levels are reassuringly low, are another clear sign that responsible lending decisions are at the forefront of lenders minds.
“The new 95% LTV plan further demonstrates to consumers how the second charge market is much more accommodating to their needs and by providing them with more flexible and tailored solutions, firmly cements the position of the secured loan lender in the marketplace.
“Shawbrook is the fifth lender to announce product changes this year and there is a sense that competition in the secured loan market is fiercer than ever.
“Almost every lender is reviewing its offerings and being fairly outspoken when it comes to the more diverse products they’re hoping to introduce. Lenders are looking to make some real impact over the next few months and are rapidly responding to each other’s criteria adjustments.
“The health of the market is particularly evident and I expect to see an increase in demand over the coming months.”
Ray Boulger, senior technical manager at John Charcol, said the impact of Funding for Lending was now obvious in most types of consumer lending except credit cards, with rates on first and second charge mortgages and unsecured loans all showing large falls since FLS was announced in June of last year.
He said: “However, second charge lenders have been much more proactive than the vast majority of first charge lenders when it comes to criteria changes, specifically in terms of extending the maximum LTV.
“The 95% maximum now available from Shawbrook is higher than nearly all first charge lenders offer, except on subsidised schemes such as NewBuy, and this enhancement highlights the lack of criteria change so far in the first charge market.
“It also means more homeowners who want to increase their mortgage, perhaps to build an extension, but have insufficient equity to obtain a further advance or qualify for a remortgage, at last have an opportunity to borrow the necessary funds over the long term, although for smaller amounts a personal loan may be available at a cheaper rate.”
Tristram added: “January’s Index figures demonstrate that the secured loans market not only has the appetite to lend but more importantly, the ability to offer products far more attractive than those found on the high street.
“The reductions in rates available to borrowers coupled with the significant increase in the number of secured loans available up to 95% LTV, now means borrowers have access to the best products for many years.
“2013 will be a year of opportunity, where more and more homeowners will look beyond the banks for finance and it’s the second charge market that will be supporting these borrowers when banks fail to meet demand.”
