Second charge lending up 23% in July

This is the fifth consecutive month of growth following six months of decline starting in August 2016.

However second charge lending saw a small monthly decrease, from £94 million in June to £90 million in July.

Fiona Hoyle, Head of Consumer and Mortgage Finance at the Finance & Leasing Association, said: “The second charge mortgage market reported its fifth consecutive month of growth in July, with new business up 23% by value and 21% by volume. In the first seven months of 2017, the number of new second charge mortgages grew by 13% to reach 12,378.

“It is important to remember that this growth is from a relatively low base. Nonetheless, the latest figures show that more customers are taking out a second charge mortgage – for example to fund renovations or help family members with a deposit for their first home.”

Harry Landy, Managing Director at Enterprise Finance, commented: “After four months of solid growth for the sector, it’s disappointing to see second charge lending dropped slightly in July. However, we should be careful not to assume this blip is a new downward trend. While the ongoing political and economic uncertainty may have had some effect, it’s important to remember the summer months are traditionally a quieter period for activity, so this lull was to be expected somewhat. It’s also important to remember that second charge market new business value is up 23% compared to the same time last year.

“The market is robust, demonstrated by four consecutive months of growth, so we’re cautiously optimistic lending will pick up again.  But in order for the sector to reach its true potential, it’s hugely important that awareness and availability of second charge loans improves among brokers to help them secure the most suitable financing for their clients.”