Second charge summer lull dampens strong year

However, on longer term measures the market continued much stronger growth.

Data from the Finance and Leasing Association (FLA) showed 1,905 second charge transactions were completed in August totalling £91m – compared to 1,977 new second charge agreements totalling £90m in July.

The August transaction totals were 11% up on the same month last year, while the total in the last three months was 18% up on the June to August 2016 and the year-to-date was 4% higher.

Values of business completed also grew noticeably on August 2016 (up 25%), the 2016 summer (up 27%) and on the year-to-date (up 10%).

FLA head of consumer and mortgage finance Fiona Hoyle said: “The second charge mortgage market reported another strong month in August, with new business continuing to grow from a low base.

“A second charge mortgage provides a useful alternative where homeowners want to raise additional funds but do not want to change their existing first charge mortgage.”

Consumer finance growth

Overall consumer finance new business in August grew by 4% compared with the same month last year.

Credit card and personal loan new business together grew by 4% compared with August 2016, while retail store and online credit new business increased by 7%.

Both these sectors were up 7% on a year-to-date basis compared with 2016.

The Bank of England has raised concerns about the increasing level of consumer debt and how it may impact a potential economic slow down.