Despite the above news, evidence we’ve provided in the Secured Loan Index, too many people I meet want to talk about what’s happened in the past, rather than what they plan to do in the future. It’s clear that the secured loan industry has come a long way in five years but I want to share what 2013 may hold for secured loans.
My top five predictions for 2013:
1. Secured loans will become commonplace in the mortgage market
Lending criteria is considerably tight on the high street right now and I believe it will be for some time. Homeowners are extremely wary of interfering with their current mortgage and pushing up their monthly payments and as a result, brokers are realising that secured loans are a more cost-effective alternative to their client.
It is also encouraging when I hear more mortgage networks are now ensuring they’ve a secured loan offering available. We will be campaigning further throughout this year, not just for awareness among brokers but ensuring that brokers fully understand the benefits of secured loans so they make them an integral part of their client offering.
2. Reduced rates for near prime borrowers and heavy adverse customers
We saw a lot of innovation from the lenders in 2012, something I expect to see more of this year. Secured loans are the best option for borrowers with a poor credit history as the high street just doesn’t cater for these types of individuals. 2013 will be the year where the secured loan industry will step in to fill the gap left by the high street lenders.
3. At least six new entrants will join the secured loan market in 2013
Two new lenders entered the industry in 2012 and as secured loans increase in popularity, it’s a given that more lenders will start to appear this year. I predict that at least 6 new lenders will enter and in turn, present new opportunities to borrowers by significantly opening up the market and igniting some healthy competition among the other lenders.
4. Secured Lending will increase and peak at £50,000,000 per month in Q3/Q4
Throughout the second half of 2012 lending volumes grossed over £30bn every month and with this in mind, I think we will see a distinct increase in levels in the last two quarters of this year too. Not only that, but figures will peak at £50m – back to 2009 levels!
5. Existing brokerages will grow but there will not be an influx of new brokerages
Anyone involved in the secured loan industry has reason for optimism, 2012 witnessed significant growth and awareness and we have every reason to believe 2013 will continue to build momentum and take our industry into the mainstream in 2013.