And brokers are hopeful this will continue with a strong fourth quarter of the year, although opinion is split over whether this is a sign of a longer-term resurgence.
Last week’s FLA data showed both the value and volume of second charge mortgage new business grew by 11% in September 2018, with 1,958 cases completed worth £89m.
This followed a largely static start to the year, however 2017 saw strong growth throughout the year.
Not a strong indicator
Brilliant Solutions managing director Matthew Arena told Specialist Lending Solutions the firm had seen growth in seconds business since changing its fee model in September.
“There has been plenty of positivity and publicity in the market as a whole about fees coming down and also about the benefits of a second charge,” he added.
“This will all help but typically does not yield a material increase unless analysed over a longer period.
“The figures concerned are also so relatively small that this increase is not as strong an indicator as such an increase in the first charge market would be.”
He added: “We are experiencing a positive trend but this increase in isolation is too early to be indicative of the trend in the market as a whole.”
Significant jumps ahead
Matt Cottle CEO of Specialist Mortgage Group (pictured), echoed much of Arena’s sentiment, but was more bullish for the year ahead.
“It’s very encouraging to see these figures, and it reflects the pattern of trade we have witnessed in second charges this year which has overall been fairly stagnant,” he said.
“But I think the next two sets of figures will also show significant jumps as the market settles after a year of increased regulatory pressures and reflecting fourth quarter activity which has traditionally been the busiest period of the year for specialist finance.”
Gaining traction with brokers
Fluent Money COO Tim Wheeldon was buoyant as well, believing the results show that slowly but surely the second charge proposition is beginning to gain traction among advisers.
Wheeldon has been urging brokers to become more aware of the second charge market as more borrowers lock-in on long-term first charge deals.
Last week he called on the Financial Conduct Authority (FCA) to insist brokers include seconds in remortgage comparisons.
In response to the FLA figures, Wheeldon said: “There is a body of thought that believes that if the second charge sector is not galloping ahead, it must be failing.
“However, we have always maintained that the take up of second charge business in the intermediary sector was never going to be a sprint, which is exactly how it is turning out.
“Those who thought that advisers were going to just roll over after Mortgage Credit Directive and endorse second charge borrowing as a remortgage alternative, were particularly naive.”
He added: “There were so many misconceptions, as well as outdated thinking and genuine disinterest about second charge lending, which needed, and still needs, to be dispelled.”