There were 1,424 agreements during the month, down from 2,355 a year ago. The value of new second charge business also fell in September to £56m, a 46 per cent decline.
On a quarterly basis, there were 3,524 new second charge agreements with a total value of £139m, annual declines of 52 per cent and 57 per cent respectively.
Despite the annual drop, this was the best performing month for the second charge market since March.
Fiona Hoyle, head of consumer and mortgage finance at the FLA, said: “As the UK enters a new phase of lockdown restrictions, lenders are continuing to do all they can to support customers during this challenging period.
“If customers are experiencing payment difficulties we urge them to contact their lender as soon as possible.”