Second charge lending up by a third in October

  • 10/11/2020
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Second charge lending up by a third in October
The second charge market saw a notable recovery in October as lending values grew to £71m, according to data from Loans Warehouse.


The packager’s secured loans index showed a 37 per cent increase in market value from £52m in September as the pandemic recovery continued.

This was also reflected in numbers of cases which grew by 31 per cent to 1,816 completions – up from 1,386.

Completions were also one day faster in October, taking on average 11 days, with debt consolidation and home improvements by far the most common uses for financing.

The index combines data from Loans Warehouse and lenders including Optimum Credit, Oplo, United Trust Bank, Norton Home Loans, Equifinance, Evolution Money and Clearly Loans.

By comparison, the official market data produced by trade body the Finance and Leasing Association (FLA) for September showed a market worth £54m with 1,424 agreements – both figures were around half that of the same month last year.


Second lockdown positivity

Loans Warehouse noted that despite the second national lockdown for England which began in November it was business as usual for the sector, with no significant changes or restrictions to criteria announced following the PM’s announcement of a second lockdown.

It added that this time around there was no restriction on physical valuations and the industry was continuing to offer products available using desktop or remote valuation models.

“The optimism stems from several lenders announcing securitisations in recent weeks,” said Loans Warehouse managing director Matt Tristram.

“First we saw Pepper Money owned Optimum Credit announce the first securitisation specifically for second charges since the start of the pandemic to the tune of £277m, a huge easing of criteria followed to ensure a return to pre-covid lending levels in the coming months.

“West One parent company Enra Specialist Finance also announced its first ever securitisation of £267m to be split across their first and second charge products.”

The firm has also predicted the sector will double in value in the final three months of the year, after doing so from May to August.



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