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Second charge agreements more than double in August ‒ FLA

The second charge mortgage market has continued to show signs of recovery with the number of new agreements and value of new business more than doubling compared to the same period last year.

According to the latest figures from the Finance & Leasing Association (FLA), there were 2,314 new second charge agreements in August, just over double the figure from the previous year. Last year, the market recorded 1,134 new agreements for August.

This continues a trend of growth, with 7,054 agreements in three months to August, more than double the figure of 2,761 during the same period last year.

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In the 12 months up to August there were 22,880 new agreements, which was up five per cent on the year before.

The value of new business for August was pegged at £95m, up from £43m during the same month last year but on a par with £102m in August 2019.

For the three months up to August the value of new business was estimated at £297m, and for the 12 months the value was £956m.

FLA’s director of consumer and mortgage finance and inclusion Fiona Hoyle said: “The second charge mortgage market continued its recovery from the pandemic in August. The market has reported more normal levels of new business in recent months which we expect to continue in the final quarter of 2021.”

By Anna Sagar

Source: Mortgage Solutions

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Majority of brokers see rise in second charge refurbs

An estimated 81% of second charge brokers have seen an increase in demand for finance for home refurbishment projects over the past six months, according to Shawbrook Bank.

Two-fifths (41%) used financing to fund a redecoration project, including fitting a new kitchen or bathroom, and another 41% used finance to fund an extension or loft conversion.

When asked about their outlook on the future, brokers who specialise in the second charge mortgage market were nearly three times more confident on the outlook for the lending environment for the rest of the year, compared to the end of 2020.

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The majority (87%) of seconds brokers were confident in the lending environment when thinking ahead to the remainder of this year, compared with just 30% when surveyed at the end of 2020.

Similarly, 75% said they were confident in the opportunity for business growth when thinking ahead to the remainder of this year – a significant rise from 19% in December 2020.

Gavin Seaholme, head of sales at Shawbrook Bank Limited, said: “The past 18 months have required many of us to spend longer at home than we ever would have before.

“With working, socialising and exercising all taking place within the same four walls it’s no surprise that people are looking to expand or make changes to their homes.

“While for many savings have gone up in lockdown, taking on a big renovation can quickly add up.

“If your client is planning to undertake a refurbishment or extension, large or small, it’s important to discuss all of their finance options with them.

“A number of landlords and property investors continue to rely on personal loans or credit cards to finance their DIY projects, which can be a riskier and more expensive approach to take.

“Understanding your client’s aims for the project as well as their current financial position will all help to inform the pathway they choose.”

By Jake Carter

Source: Mortgage Introducer

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Second charge mortgage market ‘returns to growth’ in April

The second charge mortgage market experienced growth of 176% in April, according to the latest data from the Finance & Leasing Association (FLA).

Figures out today show the value of new business in this part of the mortgage market grew by 154% compared to the same month last year.

Fiona Hoyle, director of consumer & mortgage finance and inclusion at the Finance & Leasing Association (FLA), said: “The second charge mortgage market returned to growth in April in line with expectations given the adverse impact of the first lockdown on new business levels in the second quarter of 2020.

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“The market is expected to record a strong recovery in new business levels during the second half of 2021.”

Today’s data revealed there were 1,890 new agreements in April which represented a 176% increase compared to the same month in 2020.

The value of new business, meanwhile, was £81 million in April 2021 which was 154% up on the previous year.

During the peak of the lockdown, in April 2020, the value of new business had plunged by 43%. So today’s figures demonstrated the strong recovery which has taken place in the second charge market.

By Kate Saines

Source: Mortgage Finance Gazette

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