Second charge lending improves but remains far below pre-Covid levels – FLA

There were 1,609 arranged during the month compared with 2,435 in February 2020 – the last full month before the Covid-19 pandemic began. 

In keeping with this, the value of business written was also down, totalling £67m during the month and representing a 37 per cent decline compared to the year before. 

Somewhat encouragingly, this was higher than the £62m and £56m worth of deals completed in December and January respectively.

Slow recovery

The slower than hoped for recovery can be seen with second charge completions down on all measures as the three months to February recorded 4,437 new agreements, a 33 per cent drop on the same period the year before. 

The 12 months to February recorded a 46 per cent contraction in business volumes with 15,417 agreements completed.

Again, a slump was evident where the value of second charge business dropped 39 per cent to £185m in the three months to February and halved annually to £640m in the 12-month period before that. 

Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA, said: “The UK lockdown restrictions over the winter months contributed to a fall of a third in second charge mortgage new business volumes.  

“As consumer confidence improves and the economy re-opens, we expect to see a strong rebound in demand in this market.”