Second charge lending jumps by nearly a third in March – Loans Warehouse

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  • 14/04/2021
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Second charge lending jumps by nearly a third in March – Loans Warehouse
Second charge lending amounted to £91.4m in March, a 31 per cent month-on-month increase, broker firm Loans Warehouse has revealed.

 

This represented a £21.8m increase on February’s £69.6m. 

Additionally, the number of completions rose by a quarter to 2,202 compared to 1,768 the previous month. This was the first time the number of second charge completions broke 2,000 since the pandemic began, according to the firm. 

It added that March 2021 business was just 1.72 per cent below the figures posted in March 2020 – a £1.5m difference.

This rise in business volumes appeared to influence completion times as the average timescale from submission to completion was 12 days in March. This was one day slower than February. 

However, Matt Tristam, founder of Loans Warehouse, said the case delay against the backdrop of a significant rise in activity showed “the industry [was] well-positioned for growth 

He added: “Despite the monthly lending increasing by £21.8m, there was just a single day increase in completion time.” 

The number of high loan to value (LTV) products returning to the mainstream sector also seemed to impact the second charge market, Tristam suggested.

Since January, lenders have provided first charge loans to those with smaller deposits by re-introducing more 90 and 95 per cent LTV deals on a permanent basis.

Overall, 49 per cent of loans were used for debt consolidation purposes while the second most preferred use was a combination of consolidation and home improvements.

Second charge loans for the sole purpose of home improvements alone accounted for 18 per cent of completions.

 

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