Second charge market pushes forward despite concerns over fees

The growth comes despite ongoing concerns around the levels of fees in the sector.

The FLA said the value of new second charge mortgage loans was £79m in April, up by 53% on the previous year. Over the three months to April 2017 the total value of second charge mortgages was £248m, up by 13% on the same quarter last year.

Fiona Hoyle (pictured), head of consumer and mortgage finance at the FLA, said: “This is a strong performance compared with the same month last year, but it is important to remember that some of the growth in new business in April will be attributable to the fact that second charge mortgage providers had a relatively quiet month in April 2016. They had just been transferred into the Financial Conduct Authority’s MCOB regime and were still bedding in their systems.”

She added: “Second charge mortgages are a useful way for consumers to fund home improvements or provide the deposit for a son or daughter’s first home.”

According to the FLA figures, the number of new second charge agreements in April was 1,581, a rise of 36% on April 2016. In the three months to April 2017, the total number of agreements was 5,151, up by 10% on the same period last year.