Second charge business up by a quarter year-on-year
Second charge business has increased by around a quarter year-on-year, figures from the Finance & Leasing Association show.
From May to July 2017 there were 2,798 mortgages written worth £270m, an increase of 24% and 27% compared to the same three months last year.
Fiona Hoyle, head of consumer and mortgage finance at the Finance & Leasing Association, said: “It is important to remember that this growth is from a relatively low base.
“Nonetheless, the latest figures show that more customers are taking out a second charge mortgage – for example to fund renovations or help family members with a deposit for their first home.”
In July alone there were 1,977 deals worth £90m, a year-on-year increase of 23% and 21% respectively.
The £90m July total still represents a fall from £94m in June.
Harry Landy, managing director at Enterprise Finance, said: “After four months of solid growth for the sector, it’s disappointing to see second charge lending dropped slightly in July.
“However, we should be careful not to assume this blip is a new downward trend.
“While the ongoing political and economic uncertainty may have had some effect, it’s important to remember the summer months are traditionally a quieter period for activity, so this lull was to be expected somewhat.
“It’s also important to remember that second charge market new business value is up 23% compared to the same time last year.
“The market is robust, demonstrated by four consecutive months of growth, so we’re cautiously optimistic lending will pick up again.
“But in order for the sector to reach its true potential, 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.”
The FLA’s second charge data relates to residential mortgages only.