A new report that has been published by the Finance and Leasing Association (FLA) shows that July brought an increase of 29% in the number of second charge loans that were agreed.
In numerical terms, the new second charge mortgage loans agreed during July came to 3,127, which amounted to a total value of £146 million. That represents an increase in value of 45% in comparison to the same month for the year before.
Speaking to Mortgage Strategy, the inclusion mortgage finance and consumer director for the FLA, Fiona Hoyle, stated that this area of the mortgage market had witnessed its highest new business total for a single month since September of 2008.
She then went on to add that:
“Of the total new agreements written in July, 54% were for the consolidation of existing loans, 15% for home improvements, and a further 26% were for both loan consolidation and home improvements.”
Second charge mortgages can be an option for those who are struggling with repayments, which may be a factor given the current cost of living crisis. However, the fact that improvements to properties account for so many of the July second charge loans suggests that the increase is not solely a matter of people needing help with loan payments and living costs.
Advisors who have finished CeMAP courses and are employed within the sector can look at the second charge market as another possible way of expanding their client bases and securing further work so that they can build up their businesses.