The secured loans market saw the 19th consecutive month of year-on-year growth in May, according to the Secured Loans Index.
It found that the total value of loans rose on a monthly basis by 4.8 per cent to reach almost £43.8 million.
Secured loans are also known as second charge mortgages and are loans taken out by mortgage holders secured against their property.
Matt Tristram, director of secured loans brokerage Loans Warehouse, who compiles the Secured Loans Index, said that the growth in secured lending is in part due to the wider audience the industry is attracting.
He commented: “In recent months some high profile publications have caught on to the growth of secured lending. This month has seen the UK’s biggest selling mortgage magazine, What Mortgage, running the cover story ‘Secured loans – what are they?’ featuring some of the industry’s leading names.”
Stuart Smith, sales manager at What Mortgage, said: “What Mortgage has seen a growing number of consumers investigating the benefits of acquiring a secured loan. For one that already has a mortgage with a need to borrow more money, then a secured loan could be a welcome alternative to remortgaging and releasing equity.
“What Mortgage decided to cover this aspect of the financial markets in a Round Table session in our June issue, bringing together a select group of industry experts to discuss and highlight the benefits that secured loans can provide to consumers, in a way that consumers can fully understand and appreciate.”
Loans Warehouse predicts at least three new entrants to the market in the third quarter of this year while existing lenders continue to make improvements.
The latest lender to announce changes to its lending process is Central Trust. These changes include an increased tolerance of mild adverse credit, consideration will now be given to borrowers in receipt of Child Support Agency or court appointed maintenance and increased loan-to-value on higher value properties.
The biggest changes were to the way income would be calculated and the ability to lend on more properties with non-standard construction; this will open up their product to borrowers who have found restrictions on such properties very limited by high street lenders in recent years.
