Slowdown in second charge mortgage growth

Equity-release-house-home-700.jpgThe second charge mortgage market continued to grow at the end of last year, albeit it at a more modest rate, following regulatory changes.

New business figures from the Finance and Leasing Association show that new business volumes increased by 9 per cent over the 12 months to the end of November 2017.

In total, there were 21,288 new second charge mortgage agreements arranged over this period.

As well as business volumes increasing, the value of these second charge mortgage also rose. These new second charge mortgage deals were worth £996m – a 13 per cent increase on the previous 12 months.

However these figures show the market is softening, following double digit growth figures in October 2017, with business volumes rising by 19 per cent year on year, and by 20 per cent by value.

Monthly figures show a just a 2 per cent increase in business volumes in November, compared to the same month a year ago. In total 1,815 second charge mortgages were arranged in November, with a value some £80m.

The FLA’s head of consumer and mortgage finance Fiona Hoyle says: “The second charge mortgage market reported further modest growth in November.

“Lenders remain focused on fully embedding the new regime which sees first and second charge mortgage regulated on the same basis.”


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