The value of new second charge business secured in October increased by 31% compared to the same period last year, the latest data from the Finance & Leasing Association (FLA) shows.
In total, £143m of lending was carried out across 3,009 new agreements, representing a rise of 18% compared to the previous year.
This means that in the three months to October, the value of new business came to £441m over 9,326 new agreements, a 44% and 28% rise, respectively.
And in the year to September, the FLA says that £1.5bn has been lent out on a second charge basis over 33,607 new agreements – increases of 48% and 36%.
FLA director of consumer and mortgage finance and inclusion Fiona Hoyle says: “The second charge mortgage market continued to report strong growth in October, with new business volumes in excess of 3,000 agreements for a fourth consecutive month.”
“The distribution by purpose of loan in October showed 57% of new agreements were for the consolidation of existing loans, 15% for home improvements, and a further 22% for both loan consolidation and home improvements.”
Today the Loans Warehouse has reported that second charge lending dropped for the fourth consecutive month in November to £135.5m.
The latest figure represented a £14.7m decrease compared to October.
Completions totalled 2,908 in November, a 6% rise from the previous month.
Despite the reduction in lending in recent months, the industry is already recording the highest annual figures since 2007.
Figures are up 36.82% year to date with second charge lending at £1.61bn for 2022.
Lending at higher loan-to-values (LTVs) dropped slightly, with just 13.74% of loans completed in November at 85% LTV or above.
The average term of a secured loan has increased by 12 months, which Loans Warehouse managing director Matt Tristram says is “potentially linked to lenders’ affordability being stretched more than ever before in recent times”.
Tristram explains that “many lenders have significantly improved their completion time, likely a result of a dip in the record-breaking lending levels seen across the summer months”.
