Second charge new business rises for first time in six months – FLA

  • 14/02/2024
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Second charge new business rises for first time in six months – FLA
The number of new agreements in the second charge market rose by three per cent annually in December to 2,161, the first growth seen since June 2023.

Data from the Finance and Leasing Association (FLA) showed that, in the three months to December, there were 7,434 agreements for second charge loans, which was a six per cent drop on the same period the year before. 

For the 12 months to December, agreements declined by a tenth to 30,466. This was marginally lower than the FLA’s expectation that there would be 30,500 agreements over the year. 

The value of new second charge business amounted to £96m in December, which was three per cent lower than the same month in 2022. 

For the three months to December, the value of business came to £341m – an eight per cent drop – and over the 12 months to December, an 11 per cent contraction to £1.38bn. 

The number of agreements and value of second charge business in December were both down when compared to November’s total of 2,646 at a value of £123m.

Fiona Hoyle (pictured), director of consumer and mortgage finance and inclusion at the FLA, said: “December saw the second charge mortgage market report growth in new business volumes for the first time since June 2023, and for only the third time during last year. In 2023 overall, new business volumes were 10 per cent lower than in 2022.  

“The distribution by purpose of loan in 2023 showed that 59 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.” 

The market is set to be stable this year, with areas of growth as people turn to the product to address their needs, industry figures have predicted.

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