Second charge lending jumps 14 per cent in January to £103m – FLA

According to the latest figures from the Finance and Leasing Association (FLA), the number of new agreements for the month went up by eight per cent annually to 2,295.

In the three months to January, the value of new second charge business came to £33m, which is up nine per cent on the same period last year.

The number of new agreements for the three months to January reached 7,218, a rise of five per annually.

For the 12 months to January, the value of new second charge business reached 1,570. This is over a third higher than the previous year.

The number of new agreements in the 12 months to January hit 33,951, which is a 27 per cent increase year-on-year.

The FLA has previously reported that the value of new second charge business has increased to £1.6bn on 2022, a rise of 40 per cent year-on-year and new agreements increased by nearly a third to 33,772.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The second charge mortgage market made a positive start to 2023, with growth in both the value and volume of new business.

“The distribution by purpose of loan in January showed 61 per cent of new agreements were for the consolidation of existing loans, 14 per cent for home improvements, and a further 20 per cent for both loan consolidation and home improvements.”

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

Andrew Fisher, chief growth officer at Freedom Finance, noted: “The second charge mortgage market got off to a flyer in 2023.

“Many of the economic tailwinds that drove substantial growth through last year remain strong with rising rates making remortgaging an unattractive option for those on longer-term fixed rate deals. Debt consolidation is another significant driver for the second charge market as people look to refinance more expensive borrowing.”