Second charge market on track for over 30,000 new agreements in 2023

According to the Finance and Leasing Association (FLA), this is a 10 per cent drop on 2022.

The figures show that in the 12 months to November there were around 30,411 new second charge agreements valued at  around £1.4bn. The latter is 11 per cent down on the previous year.

In the three months to November 2023 there were around 7,713 new second charge agreements, a fall of 14 per cent on the same period the year before, with the value pegged at around £353m, a decease of 15 per cent year-on-year.

In November, there were around 2,646 new second charge agreements with a value of £123m. Both figures are down six per cent on the prior year.

Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA, said: “The distribution by purpose of loan in November showed that 60 per cent of new agreements were for the consolidation of existing loans, 11 per cent for home improvements, and a further 24 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.”

The FLA’s previous figures for October show that the number of new second charge agreements came to 2,627, a 13 per cent drop on the same month a year ago.  The value of second charge lending came to £122m, a 15 per cent fall on the year before.

The number of new second charge agreements and value also dropped in September by 22 per cent and 25 per cent year-on-year.

However, several lending figures have said that demand for second charges will continue to grow in 2024 to fulfil additional borrowing needs without remortgaging and distributing their existing mortgage arrangement.

There are also rumours of possible new entrants coming to the market this year, which would make the market more competitive and give brokers and borrowers more choice.