FSEGlasgow: Seconds “a mile away from where they need to be”, admits Alistair Ewing.

Ryan Bembridge

March 21, 2017

The second charge market is a mile away from where it should be in size, The Lending Channel’s managing director Alistair Ewing has lamented.

Speaking at the Financial Services Expo Glasgow 2017, Ewing (pictured) said the industry needs up its game to educate brokers on when the products are appropriate.

He said: “Seconds are a mile away from where they need to be. It’s a niche market of course, but it needs to be a bigger niche market.

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“The influx of business we might have expected post-MCD has not happened and we need to do a better job in terms of educating the consumer.

“For some it’s still seen as a loan of ‘last resort’ and that’s not the case.”

He added: “The market’s not gone far enough yet. We have loads of brokers on our panel who still won’t consider seconds, despite our efforts to educate them. It needs to grow.”

Robert Sinclair, chief executive of AMI, agreed that seconds are suitable in the right circumstances.

He said: “I see a second-charge mortgage as a good way to do debt consolidation; taking the second over a shorter term, and that’s likely to keep the regulator happy as well.”

John Coffield, head of Paradigm Mortgage Services, felt the sector simply needs time to see the products grow more popular.

He said: “I still think there is a hangover with seconds in that they are viewed as expensive products, which I don’t believe they are.

“It does take a while for these things to bed in; just because the regulator says it should look a certain way, doesn’t mean it won’t take time.”

Coffield reckoned there are competition issues that need to be addressed in the Financial Conduct Authority’s market study.

He said: “I think there are competition issues surrounding new lenders coming to market and the challenges they face.

“I think there are issues in the directly authorised market who can’t compete with the larger networks, because of the restrictions placed on new lenders.”

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