Second charge lending jumps 14 per cent month-on-month to £144.5m

Second charge lending rose by around 14 per cent in June to £144.5m against May, a report has said.

According to Loans Warehouse’s Secured Loan Index, lending figures have “consistently dropped” since the turn of year, with much of the fall in activity attributed to the mini Budget.

The report added that the second charge market was on the rise again as this was the second consecutive month of “significant growth”.

The lender said that the increase in lending compared to May was also notable given Shawbrook’s pausing of second charge lending. 

The report continued that total lending to date is just shy of £718m.

Loans Warehouse said that the number of completions was the highest in 2023, coming to around 2,954. This is up from 2,714 in the prior month.

The report said that consolidation accounted for 46 per cent, consolidation and home improvements made up 34 per cent with home improvements taking up 13 per cent of loans. Asset accounted for around six per cent and the remainder was other.

The average completion time was 13.1 days from submission to completion, which is 0.73 days faster than May.

The average term was 16.2 years and the majority of lending, 88 per cent, was above 85 per cent loan to value (LTV).

New lenders entering the market

The report said that there was “positive news” for the sector, with around three new lenders set to the enter the second charge space this year.

“It’s widely known within the industry that Cardiff will be the base for two new lender launches towards the end of the year, one of which is on record, Admiral Money. In addition, it’s looking likely that Scroll Finance will beat them both with their launch expected in the next few months,” Loans Warehouse said.

The report continued: “These three lenders are expected to bring much-needed competition to the market and give options to borrowers on low-rate mortgages who need to raise additional borrowing.”

In an interview with this publication, Loans Warehouse co-founder Matt Tristram said that there needed to be an “injection” of new lender blood into the second charge space, hinting at the time that there were lenders eyeing the space.