Increasing link between first and second charge lending predicted as market grows

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  • 10/06/2016
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Increasing link between first and second charge lending predicted as market grows
As an increasing number of brokers are introducing second charge lending into their advice remit, the market will become further linked to first charge lending, a specialist in the sector predicts.

Tim Wheeldon, chief operating officer at secured loan broker Fluent Money, said that the future looked bright for the second charge sector.

“I think we are going to see a lot more collaboration between first and second charge lenders as well as new second charge product enhancements, which are more closely aligned with first charge products,” said Wheeldon.

He said that the transitions made when second charge lending was brought under the Financial Conduct Authority as part of the Mortgage Credit Directive (MCD) were not as disruptive as expected and that the sector was now gathering pace.

“It has only been 11 weeks since the second charge market was brought under the MCD and I have to say that the transition went far more smoothly than many pundits expected,” said Wheeldon.

“Of course, there were some teething problems with systems and correct ESIS (European Standardised Information Sheet) provision, but thanks to the supportive relationship between lenders and distributors like ourselves, the few issues which arose were quickly overcome and now it is all about new business.”

Wheeldon said it was testament to the work done by the regulator, the Association of Mortgage Intermediaries and individual lenders and distributors that the “positive message about the increasing viability of second charge for capital raising has definitely got through to advisers”.

He predicted that the new demographic of first-time second charge advisers will becoming increasingly active over time and suggested that brokers who are uncertain or not confident about the market should forge partnerships with specialists who can act as an aggregator or provide a complete advice package.

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