According to data from the Finance and Leasing Association (FLA), the value of second charge lending amounted to £122m. This was a 15 per cent drop on the year before.
Over the year to October, 30,582 second charge agreements have been arranged at a value of £1.4bn. These represent respective falls of nine and 10 per cent when compared to the same period last year.
A steeper drop was recorded during the three months to October, when the 7,771 agreements were down by 17 per cent and the lending value of £351m was a 20 per cent drop.
Second charge used for debt consolidation
Fiona Hoyle (pictured), director of consumer and mortgage finance and inclusion at the FLA, said: “Recent trends in the second charge mortgage market reflect a strong performance last year that has not been sustained during 2023 and the subdued economic outlook.
“The distribution by purpose of loan in October showed that 61 per cent of new agreements were for the consolidation of existing loans, 12 per cent for home improvements, and a further 23 per cent for both loan consolidation and home improvements.”
“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”