The volume of completed secured loans during May 2012 was 17% up on the same period in the previous year, with the total value topping £300m for the first time since November 2010.
This follows a rise shown in the figures in the first quarter, growing 14% by value and 4% by volume from January 2012.
Jonathan Clark, partner at Chadney Bulgin, told Mortgage Solutions: “This is definitely something that we’ve seen, mainly due to the general tightening of lending criteria meaning that some people are unable to get a new deal with their lender.
“Interest-only has been a big issue. A lender like Woolwich would now insist on a repayment mortgage being put in place. In these cases it makes sense to take a further advance and continue with the low rate than try and find a new deal.
“Second charges have an image reputation and it will take a long while until it changes, despite it often being a good solution for clients. This is where brokers can help by letting their clients know it is a good option.”
Bradley Moore, director at Brightstar Financial, said the increase in secured loans was down to increased difficulty obtaining new mortgage and remortgage products.
“The evidence is clear. The new figures underline the proof that secured loans with their transparent structure, historically low cost, improved lending criteria and no upfront charges can provide a welcome avenue for brokers looking to raise capital for clients in the face of the restrictions in the mainstream mortgage market.”
