Second charge market set to ‘become even more competitive’ – Peach

Speaking to Specialist Lending Solutions as part of the Get to Know Your British Specialist Lending Award Winner series, Dynamo’s senior secured loans consultant Rachael Peach (pictured) said: “I believe the second charge market is going to have a really strong start to 2022 and become even more competitive as the year progresses.

“With the cost of living on the rise, more clients may decide to take a close look at their finances to try to reduce their outgoings by consolidating debt. Also, the continuing popularity and necessity of working from home means that I expect the recent increase in property improvements and extensions to continue.”

Peach said lenders had been “amazing and very supportive to brokers in the last year” and that they had been “very fair with criteria and products”.

She said this had made the market “even more competitive”, which was a “really good thing”.

Peach explained: “The second charge market is a very exciting industry and lenders are always looking to make changes and improvements. With regard to clients, I have seen a lot of customers this year looking to do a second [charge] to improve either their financial situation or their property due to Covid-19 and or lockdown.

“Most of the clients are looking beyond Covid-19, however, implementing changes that will improve their lives moving forwards.”

Changes in second charge buy-to-let and self-employed struggles

However, Peach said the emergence of a new lender in the unregulated buy to let market offering low rates could be a challenge for established lenders who may need to revise their buy-to-let second charge proposition to “remain competitive”.

She added that she expected there to be new products and criteria changes as result.

Peach also cited the self-employed sector as one that might struggle in the first six months of the year.

Peach said: “The self-employed are likely to have experienced a bigger decrease in income as a result of lockdown periods, meaning that affordability will be more challenging for them.

“However, the flexibility shown by second charge lenders should ensure an overall strong performance.”

Connells keen for ‘more active role’ in second charges

She added that whilst she was currently the only consultant at Dynamo specialising in second charge mortgages, the acquisition of Connells Group by Dynamo last year presented a “huge opportunity” in 2022.

Peach explained: “Connells are keen to have a more active role in the second charge market and Dynamo will undoubtedly have a big part to play. I am hoping that this new relationship will lead to many more second charge opportunities and to further growth within the department as a direct result.”