Homedirect loanSecond charge new mortgage business up by 48% in April: FLA

Second charge new mortgage business up by 48% in April: FLA

[ad_1]

The volume of second charge mortgage new business grew by 48% in the year to April 2022, the latest figures from the Finance and Leasing Association (FLA) show.

The total number of new agreements in April was 2,802, worth £127m, representing a 54% increase compared to the previous year. 

Of the new agreements, 53% were for the consolidation of existing loans, 16% for home improvements, and a further 25% were for both loan consolidation and home improvement.

However, on a monthly basis, the figure represents a decrease from the 3,058 new agreements, worth £139m in March.

For the three months to March, 8,520 second charge new agreements were arranged, worth £385m. 

Figures were up for the 12-month period to March 2022, with 29,432 worth a total of £1,285m, which represents an increase of 83% in value compared to the previous 12 months.

Commenting on the latest new business figures for the second charge mortgage market, FLA director of consumer and mortgage finance and inclusion Fiona Hoyle says: “The second charge mortgage market reported another strong performance in April, with annual new business volumes only 4% below the pre-pandemic peak.”

“Of the total new agreements written in April, 53% were for the consolidation of existing loans, 16% for home improvements, and a further 25% were for both loan consolidation and home improvement.”

Meanwhile, Freedom Finance chief commercial officer Andrew Fisher says the current economic environment could create an opportunity for growth for second charge mortgage lenders.

“The second charge mortgage market continues to show continued growth and we expect this to accelerate through the year as people look to capitalise on property equity following the boom in house prices through the pandemic.”

“As the cost of borrowing rises and household budgets are squeezed, debt consolidation is likely to be another major theme of the current inflation shock, and second charge mortgages can be a timely and favourable method of clearing or reducing existing debts.

“Given the recent increase in interest rates and potential further hikes from the Bank of England, those on longer-term fixes may be reluctant to re-mortgage given they would likely move on to a more expensive rate and may also face a hefty Early Repayment Charge – second charge mortgages serve those customers’ needs very effectively.”

[ad_2]

RELATED ARTICLES

Most Popular

Recent Comments