Data from the Finance and Leasing Association (FLA) showed £259m worth of second charge loans taken out in the three months to June – up 36% on the same period last year.
There was also a substantial increase – up 28% to 5,402 – in the number of second charge loans completed in Q2 compared to Q2 2016.
FLA head of consumer and mortgage finance Fiona Hoyle (pictured) said: “In June, the second charge mortgage market reported its fourth consecutive month of growth, with new business up 33% by value and 22% by volume.
“The number of new second charge mortgages in the first half of 2017 was 10,401, 11% higher than in the same period in 2016.
“Second charge mortgages can be particularly useful when a customer wants to raise additional funds but does not want to change their existing first mortgage – especially where this involves additional costs. They are regularly used by customers to fund home improvements,” she added.
Overall, consumer finance borrowing grew 7% in June compared to the same month last year, with 4% growth in the second quarter of 2017.
Credit card and personal loan new business together grew by 10%, while retail store and online credit new business increased by 3%.