The latest figures in the Secured Loan Index are the best since the index began and the best since October 2009, writes Robyn Hall.
March saw a 17% increase on the previous month, breaking the £35,000,000 barrier for the first time in nearly four years. In total £36,241,140 was lent in March 2013.
It’s also a record breaking 17th consecutive month showing a year on year increase in secured lending and there are no signs of this slowing.
Mike Lawton, managing director of Which? Mortgage Advisers, said: “When a Which? Mortgage Adviser is building a relationship with a customer; we endeavour to provide the most suitable option for their needs. We are receiving a growing number of enquiries where clients are in the scenario of having a great product on their existing borrowing but unable to raise additional finance without losing their competitive product, an offset facility or potentially to having change their repayment strategy.
“With the range of secured loans available and new product launches with competitive rates secured loans need to be considered in our research if we want to provide comprehensive advice to our customers. The headlines of this edition of the index demonstrate how secured loans are becoming the solution for many customers’ requirements and with the support of Loans Warehouse we can ensure that our advisers can consider every option available to the customer.”
Matt Tristram, Managing Director of Loans Warehouse, which produces the index, added: “A record breaking start to the year was almost inevitable after the changes introduced by the industry’s major players Nemo Personal Finance and Shawbrook Bank, rates at an all-time low for second charge lending at just 5.59% and LTVs increasing to 90% & 95% respectively. But a record breaking quarter with over £100 million lent and March figures of £36,241,140 in such a short month was a pleasant surprise.”
Shawbrook Bank had the best month of any single lender since the Secured Loan Index records started in June 2012, accounting for over a third of secured lending in March.
Other news to bring confidence in the last few weeks was the latest RICS housing market survey which showed the amount of homes sold in the UK has reached a three year high during March as increased confidence in the market continues to be backed up by sales.
Last week also saw the launch of the UK’s cheapest Buy-to-let secured loan from the UK’s biggest secured loan lender, Shawbrook Bank. The first sub-10% buy-to-let secured loan has been released allowing borrowers loans up to £75,000 based on the BTL rental income.
This isn’t just another product in an area already over serviced. This is the cheapest buy-to-let second charge on the market today taking the number of secured loan providers lending on buy-to-let properties to five.
David Johnson, managing Director of Lending at Shawbrook Bank, said: “We have listened to our introducers and agree with them that this is very much a growing market, which is also very much underserved and we are delighted to bring this additional facility to the Shawbrook suite of loan plans. As a bank, we continue to listen to the needs of the market and try to be innovative where we believe an opportunity presents itself.”
Tristram said: “Within the last month we have seen the start of what will become the most significant change to the secured loan industry – the regulatory migration from The Office of Fair Trading to The Financial Conduct Authority. As of yet no definitive decisions have been made on the future regulations but the consultation period has started and more detailed rules for the new regime are expected later in the year.”
Transfer to FCA regulation will start from April 1st 2014. Firms holding an OFT licence will be able to continue to undertake consumer credit activities and will hold interim permission until full authorisation is granted. The FCA will be responsible for the regulation of all consumer credit, not just secured loans.
Tristrsam added: “It is a big task and no doubt many challenges will be faced but it will be extremely interesting to see what the future regulatory landscape looks like.”
To create the index Loans Warehouse analyses the figures released directly to them by UK secured loan lenders. Figures prior to January 2012 are taken from the FLA.