Annual secured lending stood at £849m for the year to July. The average loan size fell to £56,120, the lowest level since January this year.
Harry Landy, director of Enterprise Finance, said: “After a slight calming in May, the second charge market soared in June and July as consumer appetite for secured loans boomed. Second charge completions have followed a similar pattern to wider gross mortgage lending in that they’ve really kicked up a gear after holding fairly steady throughout the spring.”
The average loan-to-value ratio for a second charge mortgage was 58% in July, slightly down from the 61% recorded in May. The typical first charge mortgage size that secured loans sit behind has remained fairly consistent throughout 2015, but fell to £237,999 in July.
“With almost £850m of second charge mortgages now being completed on an annual basis, it’s surely only a matter of time before we are talking about a £1bn-a-year industry,” said Landy. “With public awareness of secured loans only set to be enhanced by the regulatory changes occurring in the spring when they come under the Mortgage Credit Directive, it would be no surprise if the sector surpassed this milestone at some point in 2016.”