There were 1,771 new second charge mortgages issued in April 2018, an increase of 8% year-on-year – but London Money director Scott Thorpe reckons “they are a long way off where they should be”.
The Finance and Leasing Association found that in the 12 months leading up to April, there was a rise of 9% in new agreements from that last year.
The value of new business was £83m in April, up by 2% year-on-year,though lending reached was £1.025bn in the 12 months leading up to April, a rise of 11% from that last year.
But Thorpe said: “I actually think these figures should be a lot higher The market should have expanded greater and faster since MCD than it has.
“The reason why that hasn’t happened is down to the same old barriers – high fees and brokers being able to access to lenders directly. Both these issues are stopping the market growing.
“What we are seeing is a gradual upturn in second charge lending. The numbers are a long way away from where they should be but all forward progress is good progress.”
He added: “I really think the industry should be concentrating on making sure the consumer is given the best advice regardless of the secured options.
“We need to see the end of advisers and packagers being able to opt out offering full advice. Do that, curb fees and open up distribution and we will be talking about double digit growth for the sector for many years to come.”
Fiona Hoyle, head of consumer and mortgage finance at the Finance & Leasing Association (FLA), said: “The second charge mortgage market reported new business growth of 2% by value and 8% by volume in April, compared with the same period in 2017.
“In the three months to April 2018, the number of new second charge mortgages was 5,339, unchanged on the same period in 2017. This versatile product continues to prove popular with customers.”