Brokers predict further 10% growth in second charge market

Since the implementation of MCD in March, almost three in five (59%) brokers say they have seen a rise in applications for second charge loans with over one in ten (12%) saying they have seen a substantial increase.

Around half (49%) of brokers say that second charge loans have now become more important to their business due to the new regulations.

Two in five (40%) brokers who have seen an increase in second charge loan applications believe that greater customer protection through increased regulation is the key driver of this growth.

This is followed by the access to larger loan sizes (39%), those who have been declined for a mortgage (37%), affordability criteria (35%) and second charges offering more flexibility for borrowers with more complex circumstances (34%).

Marie Grundy, managing director of V Loans, said: “The second charge lending sector has been subject to unprecedented regulatory change in last six months. We believe the sector post MCD is moving in the right direction.

“However, whilst the rules for first and second charges have been aligned, the processes are fundamentally different. The value of the support that can be provided by Master Broker firms, both in terms of providing extensive research of the market and access to experienced processors to ensure applications reach completion stage cannot be underestimated.”