A second charge mortgage is a second loan secured against a property, provided by a second lender (the initial mortgage is described as a ‘first charge’).

The value of second loans secured against an asset rose to £86.7m compared to £60.9m in November  the previous year.

However, this was still a 12% decrease month-on-month from October’s record figure of £98.5m.

Harry Landy, sales director of Enterprise Finance, said the drop was expected and typical of November as many consumers expand existing sources of financing, such as overdrafts, rather than strengthen their level of borrowing in the run up to Christmas.

The average loan size increased from £56,553 in September to £58,366 in November, a 3.2% rise.

The typical size of the first charge that secured loans sit behind dropped 12% to £194,644 in the two months to November.

Landy said the drop shows consumers are taking on less overall borrowing, and are now choosing secured lending over alternative forms of financing such as remortgaging.

Lenders kept loan-to-value ratios stable at 61% in October and November, which Landy said protected borrowers and promoted stable industry growth.

“By only lending at around 61% of the asset’s value, there is a reduced risk of defaulting or borrowers being left in negative equity should asset prices decline. By keeping these ratios stable, the industry can remain confident that its expansion is sustainable,” Landy said.

Enterprise Finance said the current booming levels of household debt in the UK could lead to a significant increase in secured lending, as consumers attempt to consolidate their loans into a single affordable package.

By securing the loan against assets like property, lenders can offer much lower rates than other forms of borrowing, Landy said.