Secured lending has grown year on year for the past 23 months according to the latest Secured Loan Index, and looks set to break recent records.
Total secured lending in September reached £41,407,293 according to the Index produced by Loans Warehouse, bringing the total lent this year to date to £355,400,000.
Second charge lending is already up 4.16% on 2012 and it is predicted that 2013 lending will total £480,000,000 which will mark the strongest year since 2009.
Matt Tristram, director of Loans Warehouse and co-founder of Clearly Loans, puts the strength of the sector down to the providers offering attractive rates and products.
Commenting he said: “Just as the Index was released last month Masthaven Secured Loans reduced rates across the range, introducing their lowest rate to date of 9.95%. Equifinance, the sub-prime secured loan lender, reduced their monthly interest rate from 1.95% to 1.60%, whilst increasing their maximum loan on their higher LTV products.
“Despite recent departures in the ranks at Nemo the lender set minds at rest with significant rate reductions across their range and the introduction of a new plan for larger loans ranging from £75,000 to £200,000.
“As a result of additional funding, Norton Finance significantly reduced rates whilst increasing their maximum loan on their headline products, taking the maximum loan offered to £50,000 at 9.9%. Additionally they have also increased the use of AVMs up to 70% LTV and simplified proof of income for self-employed applicants, a trend others are following.
“Shawbrook Bank now class professional self-employed applicants in the same bracket as employed, removing the 1% loading that would have been previously incurred and now only asking for the most recent SA302 instead of the last two.
“As the frustrations over valuation times continue, Shawbrook Bank also updated their criteria with the introduction of drive-by valuations accepted across the range. Prestige Finance also acted with the well published introduction of AVMs to 65% LTV for loans up to £50,000, whilst at the same time increasing LTV on their prime plan to 80%.”
The month also saw the launch of Precise Mortgages into the secured loan arena. Simon Carr, director of secured loans at Precise, said: “The move into the secured loan market is a natural progression for us. We have seen consistent growth in the market over the past 2 years, which is set to continue.
Norton“The availability of this product is becoming more and more valuable to the mortgage broker; by entering this market we aim to increase the awareness of the benefits and importance of brokers offering secured loans as a viable solution for their clients.”