The number of second charge agreements counted in August fell 52 per cent on the previous year, the Finance and Leasing Association reports, which compares to a drop of 64 per cent seen in July.

In total, there were 1,134 new second charge agreements in August. In July there were 966.

The value of new business came in at £43m in August, a 57 per cent fall on last year’s figure, an improvement on the £40m of new business recorded for July.

In the three months to August, £110m of new business occurred, 66 per cent down on the year, and 2,761 new agreements were completed, which is a 62 per cent fall.

In the 12 months to August, the FLA says the has been £898m worth of new business via 20,259 new agreements – both metrics 24 per cent below those of the previous year.

FLA head of consumer and mortgage finance Fiona Hoyle says: “While the second charge mortgage market remains subdued compared with pre-crisis levels, it is encouraging to see the number of new mortgages increase month-on-month since the record-low in May.

“Lenders are continuing to do all they can to support customers during this challenging period and customers experiencing payment difficulties should contact their lender as soon as possible.”