Second Charge Lending
Seconds repossessions tumble as sector breaks free of CCA rules
Second charge mortgage repossessions fell by more than a half in the first quarter of 2016, compared to the same period last year, as the industry took advantage of freedoms extended by the FCA to help borrowers in financial distress.
Figures from the Finance and Leasing Association (FLA) found there were 34 second charge repossessions in Q1 2016, down by 53% on the previous year.
Fiona Hoyle, head of consumer and mortgage finance at the FLA, said the drop ‘further demonstrated lenders’ efforts to help customers in financial difficulty’.
“Second charge lenders have more flexibility on how they can assist customers with repayment problems, now that they are regulated by the FCA’s mortgage rules,” she said.
“The previous Consumer Credit Act [CCA] regime was much more restrictive.”
The highest number of repossessions recorded in a quarter since the beginning of 2012 was in Q1 2013, when 226 homes with second charge mortgages were reclaimed.
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There was a total of 228 secured mortgage repossessions last year, a significant decrease from the 1,612 in 2008, according to the FLA data.