Looking at the quarter ended April 2016, secured loan lending was up by 12%, to £218m, compared with the same quarter in April 2015.
However, the market reported a fall in new business in April of 19% by value, to £51m and 28% by volume, compared with April 2015.
Geraldine Kilkelly, head of research and chief economist at the FLA, said that the fall in monthly second charge mortgage new business was not unexpected. She said that the market had been busy bedding in new systems following its move to the Financial Conduct Authority’s (FCA) mortgage regime at the end of March.
Consumer new finance business increased by 8% in April, to more than £7m. The FLA said that the figures showed growth across most of the main consumer finance products, which it attributed to continuing consumer confidence in the market.
Commenting on the FLA’s report, Marie Grundy, managing director at V Loans said: “Most broker firms and lenders reported record trading months in March to coincide with the challenges posed by the lack of transitional arrangements for CCA pipeline loans. It is therefore not surprising to see a dip in second charge lending for April.
“One thing that is clear, following the move across to the new regulatory regime, is the revitalisation of this market and, with the surge in interest from mortgage intermediaries to include seconds within their advice proposition, we would expect to see a growth in the volume of second charge transactions as we move into the second half of the year.”