According to the Loans Warehouse Secured Loan Index, this was up by £3m. Annually, however, second charge lending volumes were down by 6.91 per cent. Loans Warehouse said lending activity for the start of 2023 was positive despite this, as lenders reduced rates for the first time since the mini Budget. 

The number of completions in January jumped by 24 per cent to 2,672. 

Debt consolidation was the main use of second charge loans during the month, accounting for a 43 per cent share of business. This was closely followed by debt consolidation and home improvements, which made up 38 per cent of lending. 

Home improvements alone accounted for 14 per cent of second charge use in January. 

 

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Second charge lenders improve service levels

The average completion time for second charge loan applications sped up by 4.48 days to an average of 14.42 days when compared to December. Loans Warehouse credited lenders for improving their service levels, resulting in faster completion times. 

The average term for loans out in January was 17.1 years and 85 per cent of the loans lent were at a loan to value (LTV) of below 85 per cent.

The level of high LTV lending fell by 0.8 per cent, which Loans Warehouse said was due to fewer products on the market following the mini Budget’s disruption.