The total volume of second charge lending reached £69.6m in February which is a 14.4% increase compared to January 2021, according to the latest Secured Loan Index by Loans Warehouse.
Research collected by the firm also shows that second charge completions rose by 24% to 1,768.
The most popular reason behind taking out a loan was consolidation at 52.64%.
This was followed by consolidation and home improvements at 21.11%.
Looking to the average completion time for second charge loans, this was 1.37 faster month-on-month in February, reducing the average time to 11.63 days and the average term was 14.95 years.
The vast majority of products were provided under 85% LTV at 79.98% according to the index.
Matt Tristram, managing director or Loans Warehouse, said: “February’s figure is still short of the previous year’s total that topped the £100m mark – according to figures published by the FLA last year – but a significant jump nonetheless.
“The other most notable change is the continued rise of higher LTV lending, which has doubled month-on-month.
“There are obvious factors that are contributing to this rise, the High Street lenders are still heavily restricting higher LTVs, whilst lending options have continued to increase from second charge lenders with the return of Equifinance’s ‘Plus Range’, and continued keener pricing at higher LTV from both Optimum & Oplo clearly making a difference.
“Overall, February’s figures shine a positive light on second charge lending. Average terms are down from 14 to 16 years and completion times are dropping, with the average second charge loan taking just 11.6 days to complete.
“We in the second charge industry was delighted to welcome back Spring Finance this week, who have returned lending up to £100,000 at 75% LTV.
“As we enter several months of social and economic change – with the benefits of the vaccine roll-out having an impact, schools reopening and lockdown ending – the prediction is that demand is set to soar.
“With that in mind, we’re confidently predicting March 2021 will see the highest lending figures since the arrival of the pandemic.”