Specialist packager Thistle Finance has seen a 12% rise in second charge mortgage activity during Q4 2018, compared to the same period in 2017, due partly to a surge in seconds used for tax bills.

Of particular note was the fact that roughly 25% of the total loans arranged were partly or fully being used to cover self-assessment tax bills, payable before the Jan 31 2019 deadline.

Mark Dyason, managing director at Thistle Finance, said: “It’s common knowledge that the seconds market is thriving and the fact that people don’t want to jeopardise extremely low mortgage rates is certainly a key driver in this.

“What stood out in the fourth quarter, however, is how a far larger number of people than usual were using second charges to pay off their tax bills.

“You can only speculate as to why, but it could be that a protracted period of high inflation has had an impact or Brexit uncertainty has reduced income or work flow.”

The secured loan surge at Thistle mirrors data from the Finance and Leasing Association (FLA), which showed the second charge market grew in December 2018 for the sixth month in a row.

The number of new agreements grew by 13% to 1,792 compared to 1,584 in December 2017, with a value of £80m — 6% higher than the £76m recorded in 2017.