Second charge new business up 33%

The second charge market continued to grow in June with new increasing by a whopping 33% by value, according to the latest Finance & Leasing Association (FLA) figures.

This is the fourth month that the seconds market has reported growth with volumes for June up an equally strong 22%.

Fiona Hoyle, head of consumer and mortgage finance at the Finance & Leasing Association (FLA), said:“Second charge mortgages can be particularly useful when a customer wants to raise additional funds but does not want to change their existing first mortgage – especially where this involves additional costs."

The number of new second charge mortgages in the first half of 2017 was 10,401, 11% higher than in the same period in 2016.

Harry Landy, managing director at Enterprise Finance, said: “The second charge market has performed strongly recently, with four consecutive months of growth highlighting the sectors robustness.

"Consumers and investors have been hit by rising inflation, and this hasn’t been helped with the ongoing political and economic uncertainty following the General Election and current Brexit negotiations.

"However, this doesn’t seem to have deterred borrowers looking for alternative routes of financing. With the market continuing to accelerate, it’s hugely important that awareness and availability of second charge loans improves among brokers to help them secure the most suitable financing for their clients. Doing so will help the sector to continue to thrive.”

The figures were released alongside a broader look at the consumer finance market which has also grown - up 7% in terms of new business.

Credit card and personal loan new business together grew by 10% compared with June 2016, while retail store and online credit new business increased by 3%.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: "[This is] in line with modest single-digit growth expectations for the year as a whole.”