Second Charge Lending Back To Pre-Pandemic Norms
Having successfully broken the £100 million barrier in June the UK’s second charge lending sector is back to its pre-pandemic norm. According to the latest figures published by Loans Warehouse, total second charge lending activity hit just over £104 million last month, which is the highest rate since the COVID-19 crisis began.
The report from Loans Warehouse painted a predominantly positive picture for the second charge sector, with the slight exception of an increase in completion times. Due to the applications involved in processing such high volumes of applications, the average second charge completion time in June was 17 days.
“The second charge lending market has now officially hit pre-pandemic levels of lending and surpassed the £100m barrier,” commented Loans Warehouse managing director, Matt Tristram
“With figures reported directly to the Loans Warehouse Secured Loan Index in June from multiple lenders, second charge lending totaled £104.3 million in June 2021 – a post pandemic high.”
“Lending increased 16% month-on-month and highlighted an incredible 365% record breaking year-on-year increase but let’s remember, this was one of the pandemic lows for second charge lending. A more realistic comparison would be lending figures from June 2019 which incredibly were all but identical to June 2021 with £105m reported by the FLA.”
“This is also a landmark month with Optimum Credit posting lending figures of £37.9m which is believed to be the most lent by a single lender since the Credit Crunch of 2006!”
Better Access to Equity for More Borrowers
Mr Tristram went on to highlight the effect high-equity loans have had on the sector, as borrowers continue to enjoy access to high LTC loans for all purposes.
“One of the biggest impacts on mortgage lending during the pandemic has been on the level of equity available to borrowers. Second charge lending continues to offer an alternative method of raising capital for many, as such we will have highlighted the split of lending over 85% LTV,” he said.
“In the year to date we have now recorded £493m in second charge lending and monthly new lending figures continue to improve.”