Recent data from the Finance & Leasing Association (FLA) has revealed a substantial uptick in second charge mortgage new business volumes, surging by an impressive 17% in February 2024. Fiona Hoyle, Director of Consumer & Mortgage Finance and Inclusion at the FLA, commented on the encouraging trend, noting that the second charge mortgage market has kicked off 2024 on a positive note. In the first two months of the year, new business volumes saw a commendable 10% increase compared to the same period in 2023. However, despite this recent growth, the twelve-month data up to February 2024 still reflects an 8% decline in new business volumes compared to the preceding year.

Delving into the distribution by purpose of loans in February 2024, the report underscores that the majority, constituting 60% of new agreements, were aimed at the consolidation of existing loans. Another significant portion, comprising 13%, was allocated for home improvements, while an additional 23% were earmarked for a combination of both loan consolidation and home enhancements.

Hoyle emphasized the importance of proactive communication between borrowers and lenders, particularly for individuals facing challenges in meeting their payment obligations. She urged customers experiencing financial concerns to reach out to their lenders promptly to explore viable solutions. This proactive approach, she stressed, can play a pivotal role in averting potential financial difficulties and ensuring a smoother borrowing experience for all parties involved.

The notable surge in second charge mortgage activity in February reflects evolving consumer financial behaviours and needs in the current economic landscape. As individuals seek avenues for debt consolidation and home enhancement projects, the accessibility and flexibility offered by second charge mortgages continue to appeal to a diverse range of borrowers. Looking ahead, continued monitoring of market trends and proactive engagement with borrowers will be essential in sustaining this positive trajectory and fostering a robust and resilient lending environment.

New second charge mortgage lending

Feb 2024% change on prev. year3 months to Feb 2024% change on prev. year12 months to Feb 2024% change on prev. year
Value of new business (£m)13022339101,415-9
Number of new agreements (No.)2,819177,331830,935-8

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Last Update: April 12, 2024