Who doesn’t love a bit of nostalgia?

Now, I was born right at the start of the 1980s, so for me it’s Saturday morning cartoons like Thundercats or Teenage Mutant Ninja Turtles (Michelangelo was definitely my favourite), the black-and-grey Gameboy, and watching films such as Back to the Future and Indiana Jones. What’s not to love!

‘Where is he going with this?’ you may well ask. ‘Apart from a bit of whip-cracking memory lane indulgence.’

Well, much like all the best things about the 1980s, things inevitably get reinvented with an up-to-date twist over time (anyone seen the Back to the Future musical yet?), and right now the second charge industry is having a bit of a renaissance.

Lenders are supplying more compelling products and service

The main nostalgia period for seconds was the Noughties. Figures from the Finance & Leasing Association (FLA) show the industry touched £400m a month of new lending in 2007, helping customers to extend homes or consolidate debt. Advertising ran over pages and pages in the red-top papers and we even had TV presenter Carole Vorderman advertising for a lender on television.

It can’t be all rose-tinted glasses, however, because alongside the good we also had the bad (125% loan-to-value, self-certification) and the downright ugly (payment protection insurance, anyone?).

Resurgence

Today, though, after all the challenges of the pandemic, it feels like the seconds market is on the brink of some real growth again.

The FLA says monthly lending was pushing up against £120m at the end of last year, which is the highest it’s been since the global financial crisis of 2008.

I’ve been around mortgages for the better part of 25 years, and around seconds for about half of that, so I like to think I can speak with a bit of authority on the topic.

We could see a month with £150m of new lending

In my view, the reason for this resurgence is simple: lenders are supplying more compelling products and service, with brokers finding a way in to customer demand, which is also up.

A lot of consumers are keen to consolidate their debt, or to do some work on their home, given that many have spent substantial portions of the past two years both living and working in it.

Lender innovation

In the first month of 2022 we have already seen some real innovation from lenders, with increased use of the automated valuation model, broader customer criteria and a bevy of interest rate reductions.

Chuck this in the mix with many brokers looking to improve systems and integrate to lenders or sourcing platforms directly and you have a great recipe for positive customer outcomes.

Not all rebirths are good but the seconds market may just deliver a blockbuster this year

What homeowner with a first mortgage too good to touch or with early repayment charges, looking to borrow some money, wouldn’t want to do that? Especially if they could do it without having to take a day off work to get a valuation, and if they could prove their income by uploading a couple of payslips and prove their ID by scanning their passport on an app, all from their armchair?

What does this mean for 2022? I don’t think it is beyond the realm of reason to think we could see a month with £150m of new lending this year. Why not? Purchase and remortgage transactions were at record highs in 2021 and, where the firsts market goes, the seconds typically follows.

A lot of consumers are keen to consolidate their debt, or to do some work on their home

Not all rebirths are good — Indiana Jones and the Crystal Skull being a prime example — but the seconds market may just deliver a blockbuster this year.

Buster Tolfree is commercial director, specialist mortgages, at United Trust Bank