September saw a notable rise in second charge mortgage volumes, climbing 27%.
- Finance & Leasing Association reports a marked increase in new business value to £149m.
- The sector experienced a third consecutive month of double-digit growth due to low interest rates.
- 58.1% of these agreements focused on consolidating existing loans.
- FLA advises those struggling with payments to engage with their lenders early.
In September, the second charge mortgage sector witnessed a significant increase, with business volumes up by 27%, according to the Finance & Leasing Association (FLA). This growth reflects the broader trend observed throughout 2024, driven by the favourable interest rate environment.
The total value of new business during September reached a substantial £149 million, demonstrating a 37% rise compared to the same time last year. This sharp escalation underscores the robust demand and market expansion in this segment.
Fiona Hoyle, the FLA’s director of consumer and mortgage finance, noted the consistent double-digit growth observed over the past three months. She attributed this upswing in both value and volume to the lower interest rates which have been enticing for borrowers seeking second charge mortgages.
Throughout the first nine months of 2024, new business volumes surpassed those of the previous year by 16%. This trend highlights the increasing appeal and deployment of second charge mortgages in financial strategies.
Analysing the distribution of new business agreements, a significant portion, 58.1%, was aimed at consolidating existing loans. Another 23.3% of agreements combined this with home improvements, while 12.1% focused solely on improving properties, indicating diverse utilisation purposes.
FLA has emphasised the importance of communicating with lenders swiftly for those who may face challenges in meeting their payment obligations. Engaging early with lenders could provide avenues to mitigate financial stress and seek appropriate solutions.
The second charge mortgage market is experiencing robust growth, reflecting dynamic shifts in financial strategies.
