2025 set to be post-financial crisis high for second charge market

Second charge mortgage new business volumes grew by 22% in October, maintaining the growth seen in each month of 2025 so far, the latest figures from the Finance & Leasing Association (FLA) show.

New business volumes are now expected to reach almost 41,000 this year which would be the highest level since 2008.

On a quarterly basis, there were 11,483 new loans approved in the three months to October with a value of £601m - up 18% by volume and 28% by value compared to the same quarter in 2024.

Annually, lending is up 15% by volume to 40,055 loans with a total value of over £2bn, up 15% by volume and 23% by value compared to the previous 12 months.

Fiona Hoyle, director of consumer & mortgage finance and inclusion at the FLA, said: “The second charge mortgage market has reported growth in the value of new business in each month of 2025 so far. The product is proving popular with consumers who want to effectively manage loan consolidation or to fund home improvements. New business volumes are expected to reach almost 41,000 in 2025 which would be the highest level since 2008.

“The proportion of new business volumes which were solely for the consolidation of existing loans held steady in October compared with the previous month at 59.5%.  A further 22.5% were for home improvements and loan consolidation, and 11.9% solely for home improvements."