The value of new business was up 26% to £183bn.
Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA, said that the market made a “positive start” to 2026, although the pace of growth had fallen slightly compared with recent months.
FCA criticism on second charge mortgage market
The figures come soon after a recent report on second charge mortgages from the Financial Conduct Authority (FCA).
The regulator looked at the market and said it was “disappointed to find evidence of some poor practices that can create a risk of poor customer outcomes”.
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Second charge mortgages allow homeowners to borrow against their property’s equity without changing their main mortgage. They make up a small proportion of the total mortgage market, typically less than 4% of regulated mortgage sales.
The regulator said that standards of advice could be improved, intermediary fees were sometimes higher than first-charge mortgages and hard to compare and that intermediaries and lenders should work together more to deliver good customer outcomes.
It pointed out that customers seeking second charge mortgages are often vulnerable, including having low financial resilience, which can put them at a greater risk of harm.
It found that advisers sometimes recommended debt consolidation even if it wasn’t clear that this was appropriate and did not consider other potential options.
“Following the FCA’s recent report on second charge mortgages, the FLA will be working closely with the regulator to understand their findings as we continue to support customers who want to consolidate higher-interest rate loans into more affordable borrowing,” Hoyle said.
Strong momentum
James Gillam, Managing Director at Pure Panel Management, also said he was seeing “strong momentum” in the mortgage market with many needing debt consolidation.
“A Q1 2026 is looking like being a record quarter for second charge valuation instructions, reflecting the wider growth in lending volumes across the market,” he says.
“This time of year especially places greater emphasis on the valuation process and speed of funding as a whole, as many loans at this time of year are needed for debt consolidation and so lenders and brokers need partners who can respond quickly while maintaining the coverage and consistency required to keep cases progressing.”
