Second charge lending volumes rise 17% in 2025 to post-crisis high: FLA

Second charge mortgage new business volumes grew by 17% in 2025 to reach the highest level since 2008, according to the latest figures from the Finance & Leasing Association (FLA).

In December, lending was up 35% by volume and 41% by value compared to the same month a year earlier. 

In Q4 2025, lending increased 27% by volume and 33% by value compared to Q4 2024.

Fiona Hoyle, director of consumer & mortgage finance and inclusion at the FLA, said: “The second charge mortgage market ended 2025 on a strong note with new business volumes up 35% in December compared with the same month in 2024. In 2025 as a whole, new business by both value and volume reached its highest level since 2008.  

“The analysis of loan purpose suggests a stable picture with the proportion of new business volumes which were solely for the consolidation of existing loans last year at 58.3%. A further 23.0% were for home improvements and loan consolidation, and 12.0% solely for home improvements.”

James Gillam, managing director at Pure Panel Management, commented: "At Pure Panel Management, we have seen strong growth in second charge surveying demand through our second charge lender and broker partners in 2025. It is not just existing lenders doing more. New entrants have moved quickly to win share after launch, and they have also helped increase total market size, not merely swap business between firms.

“As volumes rise and these new brands scale up, lenders and brokers need surveying partners who can cope with demand, cover the right areas, and keep cases moving. Those who pick the right partners with experience in the sector will be the ones who keep service steady as the market keeps growing.”

Loans Warehouse says the real significance of the latest figures lies in the number of customers now using the product.

Matt Tristram, co-founder of Loans Warehouse, said the specialist finance sector has historically compared markets by total lending value, but this can distort the true scale of lending activity.

Tristram commented: “Most market commentary focuses on how many billions have been lent, but that doesn’t always reflect how many people are actually being helped.

“If we start measuring specialist finance markets by the number of borrowers helped rather than the billions lent, second charge lending is quietly becoming one of the largest sectors in the UK.

“Bridging loans play a vital role in supporting property developers and investors, but they are typically much larger transactions, we love bridging, its a huge part of what Loans Warehouse offers.

“Second charge lending is fundamentally different. These are usually £40,000 to £60,000 loans used by homeowners to consolidate debt, fund home improvements or raise capital without refinancing their main mortgage.

“For many homeowners, remortgaging simply doesn’t make sense when they are sitting on a low fixed rate. That’s where second charges have become a mainstream solution. When you step back and look at the numbers, the market is now helping around 4,000 homeowners every month, which shows just how important the sector has become in the wider lending landscape.”