Secured loans up 44pc in a year
Loans Warehouse said the rise is the biggest the industry has seen for over three years, taking lending back to pre-credit crunch levels.
Gross lending totalled £34.6m in August, a 6.6% rise from the £32.3m lent in July – the second month in a row where lending has exceeded 2009 figures.
Matt Tristram, joint Director of Loans Warehouse, said: “Will secured loan lending continue to smash £30m a month for the rest of the year? All our research is suggesting yes.
“According to recent reports, although it has been five years since the Northern Rock crisis, it has never been harder to get a mortgage. This distinct lack of appetite for risk in the first charge sector is forcing borrowers to seek finance elsewhere and these figures make it clear exactly where they are looking.
“Secured loans have started to see some recognition in the national media over the last few weeks, something we’ve not seen since the market unravelled.”
Both The Financial Times and the Daily Express gave a nod to the secured loans industry, when they noted consumers can take advantage of the latest Government proposals offering homeowners a planning permission holiday for extensions.
Tristram added: “There is no reason that a secured loan can’t be a viable alternative to remortgaging and judging by these results August was the month the nation started to sit up and pay attention.”
Chris Morling, managing director of financial comparison site money.co.uk, said he’d seen a “notable increase” in consumer interest in this area over the past few months.
And he added: “With mortgage lending still at a comparative standstill and borrowers’ options somewhat limited, it’s reassuring to see that the secured loan market is not only becoming a viable alternative for homeowners looking to borrow, but also a more affordable one too.”
Tristram said in the past two weeks two lenders revealed plans on how they intend to provide the sector with a platform for future growth.
Equifinance announced it is close to securing “seven figure” funding while Blemain Group announced it had secured £640m of additional funding.
Tristram said: “Both announcements make one thing clear, that whilst the mortgage market continues to demonstrate a loss of appetite the second charge lenders are ravenous.
“Supply is now growing to meet demand in the secured loans market and I don’t envisage anyone complaining that they’re full anytime soon.”