According to a broker who works in the ‘second mortgage’ market, the number of these mortgages – which are used by borrowers to fund home renovations and to consolidate debt, for example – look set to grow by another 100% between October and December.
Loans Warehouse revealed, in February of this year, just before the Covid-19 outbreak, second charge lending stood at a total of £107 million.
This figured plummeted by 81% by May to just £21 million but since the market recovery took place over the summer lending had more than doubled by August to £43 million.
Matt Tristram, co-founder of Loans Warehouse, said: “Despite the pandemic we have traded throughout the year and it is our opinion the opportunity in Second Charge lending has never been better than it is today.
“I’m confident that August’s results be at least doubled again before the end of year. Despite a rocky few months for the Second Charge sector positivity has once again returned.”
Tristram’s comments come on the back of record mortgage lending during 2020. However, the market has been plagued with product restrictions for borrowers who have small deposits and there have also been long delays.
However, Tristram predicts that increased demand will also see many borrowers turn to Second Charge products in the months ahead to raise funds for the home improvement boom and debt consolidation.
Second charge mortgages can provide a way of borrowing money without remortgaging your home. The loan is secured against your home, however, which is why it is known as a ‘second’ mortgage.
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