Exclusive: Second charge adviser numbers fall 9% YOY in 2024, placing importance on education and technology

Written By:

Anna Sagar

Posted:

September 30, 2025

Updated:

September 30, 2025

The number of second charge advisers fell 9% year-on-year to 12,507 in 2024, the largest decrease since 2020, which is seen by industry executives as “surprising” and “unexpected” given market buoyancy, this publication understands.

According to a Freedom of Information (FOI) request sent to the Financial Conduct Authority (FCA), the number of second charge advisers had been on the rise from 2021, coming to a high of 14,392.

However, the number of second charge advisers started to fall slightly from 2023, decreasing by 5% year-on-year between 2022 and 2023 to 13,690, and then falling 9% between 2023 and 2024 to 12,507.

This is the first time that second charge adviser numbers have fallen to under 13,000 since 2017.

Year	Number of employees that give advice in each area (advising on second (and subsequent)) charge mortgages	Percentage change YOY
2016	10,239
2017	12,364	21%
2018	13,627	10%
2019	14,101	3%
2020	13,583	-4%
2021	14,050	3%
2022	14,392	2%
2023	13,690	-5%
2024	12,507	-9%

Source: FCA FOI data

Mind the affordability gap

Sponsored by Newcastle for Intermediaries

The decline is surprising given the growth of the second charge market in the past few years, with the latest figures from the Finance & Leasing Association (FLA) showing that there was over £1.9bn of new second charge business and 38,304 second charge agreements in the 12 months to July 2025. Both are up 24% and 16% on the previous year.

Jason Berry, group sales director at Crystal Specialist Finance, said the fall is “unexpected”, as second charge mortgages “remain an essential part of the adviser toolkit”.

“What makes this decline unexpected is that with higher interest rates, tighter affordability checks, and a growing number of borrowers locked in to competitive first charge deals, second charges can often provide the most cost-effective and practical solution.

“They allow clients to raise capital without disturbing their primary mortgage and can be especially valuable for debt consolidation, home improvements, or supporting family members,” he noted.

Berry said the challenge was not in demand but in “adviser confidence and understanding”.

“Second charge mortgages have historically been perceived as complex, and with fewer advisers specialising in the area, knowledge gaps have been evident. In addition, firms may be prioritising core mortgage activity at the expense of diversifying their permissions,” he noted.

Richard Barham, second charge mortgage specialist at Brightstar Financial, agreed that the second charge adviser fall was “surprising” but said the “current climate” could be a factor.

“Interest rates have not been reducing by as much as we hoped, coupled with a slower property market. However, the demand for secured borrowing is still there. At the same time, firms could be sticking with their existing staff numbers or transferring them over to other areas of their business where required.

“They may not have recruited new advisers where they may have otherwise replaced any leavers. Regulatory requirements and experience in the sector could also be a factor,” he noted.

Darren Perry, specialist placement team manager at Connect for Intermediaries, agreed that the most recent downturn was “unexpected”, especially as second charges have “transitioned from niche products to mainstream financing solutions”.

Perry noted many firms were being “cautious due to the complexities involved in the advice process and the stringent compliance requirements”.

He added that second charges typically yield lower profit margins compared to first charges, smaller loan sizes lead to reduced procuration fees, and the advice process is “often more time-consuming, requiring extensive affordability checks”.

“Higher fallout rates and the necessity for additional training further diminish the commercial appeal of this market,” Perry said.

James Caldwell, director of Clifton Private Finance, said a skills gap was a factor, but there could also be a lack of confidence that the current buoyancy in second charge business will continue amid a focus on cutting costs by mortgage broker business owners.

He added that from its experience, first charge mortgage brokers “often do not feel confident advising clients on second charge options”, and noted that education was crucial, pointing to specialist finance packagers that have “established training programmes for new recruits”.

Technology advances will optimise advisers’ time

Matt Tristram, co-founder of Loans Warehouse, said second charge growth has been “driven by more product options, greater awareness, and, most importantly, continued streamlining of processes”.

“The reality is simple: we can now achieve more in the same time with fewer resources. This isn’t a reduction in advice – in fact, it’s the opposite. Advances in technology mean advisers spend less time on administration and more time delivering advice, a trend that will accelerate as AI enters the second charge market.

“AI won’t reduce the standard of advice, but it will reduce admin, speed up underwriting, and bring greater consistency,” he noted.

"The reality is simple: we can now achieve more in the same time with fewer resources. This isn’t a reduction in advice – in fact, it’s the opposite."

- Matt Tristram, co-founder of Loans Warehouse

Tristram pointed to the launch of Admiral Mortgages into the second charge space, noting that it had the “most streamlined processes of any lender”, which had translated into the lender having one of the higher conversions of companies it dealt with.

“Looking ahead, I believe adviser numbers may slowly decrease to a natural level, not because advisers are being replaced, but because technology and AI are evolving the role. That shift will free up advisers to focus on outcomes while creating new roles that support the delivery of the very best results for clients,” he said.

Barham said the market “currently looks promising”, with new lenders entering the market and offering lower rates and quicker processes.

“We are also experiencing a lot of online valuations being accepted and lenders’ automatic valuation model (AVM) criteria… improving, which saves time and money. What with these quicker processes, [it] means advisers can process higher volumes than previously experienced,” he said.

Second charge market should ‘focus on targeted education and engagement’

Berry called on the sector to “focus on targeted education and engagement” and said specialist distributors, specialist lenders, networks, and trade bodies should “collaborate to facilitate structured training programmes, webinars, and case study sessions designed to demystify the process and highlight when a second charge is the right option”.

“By making this knowledge accessible and practical, more advisers will see the value in retaining or gaining permissions, ensuring customers benefit from the full range of borrowing solutions [that] are available,” he noted.

Lucy Waters, managing director and founder of Aria Finance, said that for a specialist product like second charge, “comprehensive training is essential”.

“In my view, the most effective way for new employees to develop is by working alongside an experienced adviser who can provide real-time answers and case-specific guidance.

“From my own recruitment experience at Aria Finance, attracting candidates to a fully office-based role can be difficult. While remote training can work to a degree, nothing compares to the value of having an expert physically present to support and mentor new advisers.

“To strengthen recruitment, the industry could do more to highlight the opportunities in second charge lending, such as career progression, specialist knowledge, and the ability to deliver real value for clients, as well as offering structured training pathways and clear development routes that make the role more attractive to new entrants,” she explained.

"Second charges are integral to comprehensive financial advice. With increased awareness and support, more advisers can harness this essential product to achieve optimal outcomes for their clients"

- Darren Perry, specialist placement team manager at Connect for Intermediaries

Perry said that to reverse this trend, the second charge industry “must actively promote the value of second charge mortgages within the advisory framework”.

“This includes enhancing training programmes, providing clearer guidance, and fostering collaboration among lenders, networks, and trade bodies. At Connect Mortgages, we believe that second charges are integral to comprehensive financial advice. With increased awareness and support, more advisers can harness this essential product to achieve optimal outcomes for their clients,” he added.

Barham said the second charge industry has “improved considerably”, but it “needs to make the process simpler, raise awareness of how these mortgages can help, and give advisers the knowledge to feel confident recommending them”.

“With the right support, more advisers could see the value in second charges and more borrowers could benefit from the flexibility they offer,” he noted.