The number of new second charge agreements in December 2020 dropped 26 per cent on the same month a year ago, says the Finance and Leasing Association.

This equates to 1,526 new agreements made in the final month of 2020.

The value of new business in December 2020 came to £62m, which is a 34 per cent drop on December 2019, the FLA adds.

In the final quarter of 2020, there were 5,100 new agreements made, coming to £205m in value, which made for a 30 per cent fall and 37 per cent fall on the previous year, respectively.

And across the 12 months to December overall, 17,109 new agreements were valued at £727m. The number of new agreements made over this time frame fell 39 per cent and, the value, 42 per cent.

FLA head of consumer and mortgage finance Fiona Hoyle says: “The second charge mortgage market has seen new business levels gradually pick up since the crisis-low reported in May 2020.

“The quarterly rate of contraction has eased – compared with the same period in 2019, new business volumes fell by 73 per cent in Q2 2020, by 52 per cent in Q3 2020, and by 30 per cent in Q4 2020.

“With consumer confidence expected to improve as 2021 progresses, demand in this market is expected to increase.”