In the 12 months to February, lenders approved 43,142 loans, an increase of 18% on the previous year, data from the Finance & Leasing Association (FLA) shows.
By value, the £214m advanced marked the most successful February for lenders since February 2008. Year-on-year, lending in February was 37% up. In the 12 months to February, loans valued at £2.237m were advanced, marking a 25% rise on the previous year.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “By providing a secured alternative to higher‑cost unsecured borrowing, second charge mortgages are proving popular with households as they help to manage affordability pressures while maintaining financial stability.
“The UK economy now faces a more challenging outlook, as the conflict in the Middle East is likely to weigh on activity, confidence and financial conditions. In this environment, the second charge mortgage market will continue to play an important role in supporting household budgeting, while affordability considerations and wider uncertainty shape the pace of growth in the months ahead.”
Last month, the Financial Conduct Authority (FCA) released its findings on the second charge market and reported examples of good practice and evidence of poor practices. Firms were told to improve the way they advised borrowers and considered suitability for the product.
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