New data from Loans Warehouse has revealed that annual growth within the second-charge mortgage market is higher than at any time since the 2008 financial crisis.
This data shows that June brought growth of 37.41% in this area of the market compared with the same month for 2021. In total, during the course of last month, mortgage lenders facilitated second-charge loans worth a total of £143.3 million. What makes the situation even more intriguing though is that, while year-on-year second charge lending is soaring, there has been a further month-on-month drop in the total.
The total loaned in second-charge mortgages fell by 5.03% in June compared with the figure for May. This suggests that the market growth is starting to tail off, but remains high compared with the period at the height of the Covid-19 crisis and lockdowns.
Volumes of second-charge loans hit their highest for a single quarter since before the financial crisis during Q2. They rose by 7.25% during that three-month period compared with the opening three months of this year. The quarterly total for January to March had already set a new record.
When it comes to what the loans were for, 41% of them were for consolidation purposes, while 37.2% were for making improvements to a property and consolidation. In total, 15.57% of them were solely for use in property improvements.
Mortgage advisors who have done a CeMAP training course will be aware that second-charge loans can be a way of helping clients in financial difficulties as well.