Average loan size doubles as secured market grows

The secured loans packager reports its average loan size has doubled during 2012 to c. £41000 and the reasons for loans from brokers are much more diverse than in the past.

Dave Pinnington, Business Development Director at V Loans said:

“Brokers are coming to us with enquiries for business purposes, investment property purchase as well as debt consolidation and home improvements. As the first charge market has retreated from lending, so secured loan lenders have stepped up to fill the gap. With Shawbrook increasing their loan size to £200,000, Blemain are now also offering larger loans up to £250,000 or up to  £500,000k upon referral and Masthaven and Nemo are offering loans up to £100k.

"This activity is feeding through to the intermediary, who faced with not being able to use remortgaging as freely as in the past, is seeing the advantages of the secured loan as an effective way to maintain existing borrowing at preferential terms and provide the means to borrow the extra funds clients need.”

Maeve Ward, Head of Sales at Shawbrook Bank commented:

“Shawbrook increasing their loan size is a breath of fresh air for the market. There are many high net worth clients that are looking to release equity from their property whilst leaving their preferential mortgage rate in place. With rates staring from 6.9%, flexible overpayment and a £195 redemption fee when 28 days notice is provided, offers complete freedom to the borrower to refinance away in the future.”