Second charge business surges by 48 per cent in April – FLA

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  • 21/06/2022
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Second charge business surges by 48 per cent in April – FLA
Both the number of new second charge agreements and value of this business rose annually in April, statistics show.

According to the Finance and Leasing Association (FLA), the value of new business totalled £127m in April, which was up 54 per cent on last year. Meanwhile, the number of new agreements came to 2,802, which was 48 per cent higher than the same month last year. 

Quarterly and 12-month increases in business were also recorded. 

The figures showed that in the three months to April 2022, the value of new business reached £385m, a 58 per cent rise on the same time last year while agreements came to 8,520, a 49 per cent uplift. 

For the 12 months to April, the value of new business rose 83 per cent to £1.28bn compared to the year to April 2021, and agreements surged by 72 per cent to 29,432. 

Fiona Hoyle (pictured), director of consumer and mortgage finance and inclusion at the FLA, said: “The second charge mortgage market reported another strong performance in April, with annual new business volumes only four per cent below the pre-pandemic peak. Of the total new agreements written in April, 53 per cent were for the consolidation of existing loans, 16 per cent for home improvements, and a further 25 per cent were for both loan consolidation and home improvement.” 

“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.” 

 

Growth for second charge market

Andrew Fisher, chief commercial officer at loan comparison site Freedom Finance, said that the current economic environment could create an opportunity for growth for second charge mortgage lenders. 

Fisher added: “The second charge mortgage market continues to show continued growth and we expect this to accelerate through the year as people look to capitalise on property equity following the boom in house prices through the pandemic. 

“This has enabled more homeowners to look towards second charge mortgages as a means of using the value of their property for other means. 

“As the cost of borrowing rises and household budgets are squeezed, debt consolidation is likely to be another major theme of the current inflation shock, and second charge mortgages can be a timely and favourable method of clearing or reducing existing debts.” 

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