The first half of 2024 saw significant growth in second charge mortgage lending, outpacing other segments.
- Second charge mortgages rose by 17% year-on-year, surpassing the growth of first-time buyer lending and further advances.
- Homeowners accessed £804 million through second charge mortgages, a stark contrast to the £76 million in buy-to-let lending.
- Since the pandemic, £3.2 billion has been drawn via second charge mortgages, marking a 27% increase from pre-pandemic levels.
- This surge highlights a shift, with second charge mortgages stepping out of niche markets and becoming a valuable option for homeowners.
The first six months of 2024 have marked a remarkable period for second charge mortgage lending, which has grown by a notable 17% year-on-year. This growth positions it as the fastest-growing segment within the mortgage market, surpassing the 13% increase seen in first-time buyer lending and the modest 5% rise in further advances.
During this period, homeowners have tapped into £804 million via second charge mortgages. In comparison, buy-to-let lending accounted for a relatively modest £76 million, underscoring a significant preference towards second charge options. Since the pandemic’s onset, homeowners have secured £3.2 billion in second charge loans, reflecting a 27% increase compared to pre-pandemic figures, showcasing a robust and evolving lending landscape.
Second charge mortgages have clearly outperformed other market segments, driven by a growing awareness among homeowners of their potential financial power. Despite previously being considered a niche financial product, the market dynamics are shifting. There is a burgeoning recognition of bricks and mortar as an untapped resource for achieving financial goals.
According to Ryan McGrath, director of second charge mortgages at Pepper Money, many individuals still overlook the benefits of homeowner loans, defaulting instead to high-interest credit options. He emphasises the importance of bridging this knowledge gap, advocating for more informed choices that could significantly benefit consumers.
As second charge mortgages continue to gain traction, it is expected that they will play an increasingly crucial role in the financial strategies of UK households. McGrath also noted the trend of second charge mortgages emerging as a viable option in post-pandemic recovery, anticipating continued growth as more homeowners consider securing their loans against property.
The rise of second charge mortgages signals a promising shift in homeowner finance strategies, promising continued growth.
