Second charge lending rises to third highest total of 2022 – Loans Warehouse

According to data compiled by Loans Warehouse from second charge lenders despite the 3.63 per cent drop on August’s record-breaking total of £166.5m, September still demonstrated annual rises in activity with a 45 per cent yearly increase. 

Due to this, the predicted total for second charge lending this year has risen and is on track to reach £1.77bn. If achieved, this will be a post-financial crisis record. 

There were 3,002 completions during the month, an 11 per cent decline on the month before. 

Average completion times slowed, with typical transactions taking 20.56 days in September. The average term for second charge loans sold during the month was 16.5 years, and 86 per cent of loans were below the 85 per cent loan to value tier. 

Some 40 per cent of loans were for debt consolidation, while a third were for debt consolidation and home improvements. A fifth of loans were taken out for the purpose of home improvements alone. 

Market upheaval

The “interesting” last few weeks were noted by Loans Warehouse, as the report acknowledged that rates had gone up by 1.75 per cent on average and a number of lenders pulled from the fixed rate market. 

Most lenders, such as Pepper Money, Oplo and Equifinance, continued to honour existing applications where an ESIS had been produced. 

Loans Warehouse said: “Other than rate, there have been minimal criteria changes recorded and lending seems to be continuing at the same level so far.”