Second charge mortgage lending boosted by 20%
The second charge mortgage market saw 20% growth in lending and transactions in October compared to the same month last year.
It follows a slump in September where figures were largely unchanged from 2016 and continues the significant growth of the sector earlier in the year.
According to Finance and Leasing Association (FLA) data, 1,880 second charge transactions were completed in October with a value of £85m – up 19% and 20% respectively compared to October 2016.
The figures were also notably up on September 2017 where just 1,693 transactions were completed totalling £77m.
This data will be particularly encouraging as after a strong start to the year the second charge mortgage market has been slowly sliding since June.
Enterprise Finance managing director Harry Landy noted that the market had recovered from its blip. He said it was continuing its upward trajectory that saw six months of consecutive month-on-month growth from March to August.
“Whether it is to fund renovations, help a family member with a deposit, or consolidate household debts, we’ve seen more borrowers taking out second charge mortgages – many at a higher value – and this has led to a strong year for the sector,” he said.
“We are cautiously optimistic that this increase will continue into next year, but it is important that brokers are aware of the range of specialist financing options around, and can therefore provide tailored advice to borrowers.”
FLA head of consumer and mortgage finance Fiona Hoyle, added: “A second mortgage continues to be a useful option for customers seeking to raise additional funds without wanting to change their existing mortgage, and are regularly used to fund home improvements.”