Awareness and use of second charges ramps up in 2025

New analysis from Pepper Money shows increased awareness and use of second charge loans among UK borrowers. 

The latest findings reveal that over half (51%) of UK adults are now aware of secured lending as an avenue to raise capital. This figure rises to 54% amongst homeowners who may be considering ways to borrow without interrupting their favourable, primary mortgage rate. 

This marks a notable rise from previous research from Pepper 12 months ago, which found that only 33% of homeowners with a mortgage were familiar with this option. 

Pepper says the change can partially be attributed to the ongoing impact of rising living costs, high inflation, and stagnating wages, which are prompting more homeowners to explore alternative ways of accessing funds. 

This growing awareness of second charge loans has translated into a strong boost in the use of secured lending. Analysis of official data from the Finance & Leasing Association (FLA) shows that the total value of lending has risen by more than 40% over a two-year period, from £333 million in Q1 2023 to £470 million in Q1 2025. 

Over the two-year period, the total volume of secured loans has increased by more than a quarter (26%), rising from 7,446 loans in Q1 2023 to 9,406 loans in Q1 2025. If these trends continue, the number of borrowers taking out a homeowner loan is expected to reach over 42,000 by the end of 2025, up from 35,706 in 2024 and 30,466 in 2023. 

A total £6.5bn of housing wealth was accessed by property owners using secured loans from 2020-2024, an increase of 27% compared to the previous five years. The homeowner loans market expanded by nearly a third (31%) during the same period, marking the highest growth rate in the mortgage industry. 

Ryan McGrath, director of second charge mortgages at Pepper Money, commented: “The secured lending market continues to gather momentum, with more than half of homeowners now aware of this previously little-known product. 

“This increased understanding, coupled with economic pressures, has been reflected in the amount of secured lending that is taking place, reaching £470 million in the first quarter of the year, which puts the market well on its way to reach £1.7 billion by the end of 2025, with Pepper Money’s 2024 lending volume standing at over £500 million.

“More consumers are recognising the opportunity that secured loans can provide. Unlike personal loans or credit cards, these loans allow individuals to unlock the value in their property, offering larger loan amounts, longer repayment terms, and typically lower interest rates - as well as enabling them to borrow without impacting the rate on their primary mortgage, which isn’t possible with a remortgage.

“While not right for every homeowner, for the right person a secured loan can provide a sensible way to make home improvements, settle personal tax bills, pay off school fees, or consolidate debts.”