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Innovation in the seconds space

ended 07. August 2024

A leading trade title has asked Newspage to seek some views on the seconds market. So here we go, y'all. Have at it. 

  • Have you done more or less seconds this year compared to last?
  • What are the main reasons people are taking out seconds?
  • Which lenders are currently driving innovation in the seconds space (for example, our attention has been brought to Interbridge Mortgages, which can apparently complete on a second in a day in some cases)?
  • What innovation could there be in the seconds space that isn’t there right now? In short, what would you do if you could build a product?

4 responses from the Newspage community

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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
A harrowing trend has emerged as the cost-of-living crisis deepens. The demand for second charges, particularly secured loans, has skyrocketed over the past two years. This alarming increase is primarily driven by desperate homeowners resorting to debt consolidation to survive.
As financial pressures mount, the need for innovative solutions is paramount. However, any new product must prioritize speed, flexibility, and transparency. Leveraging AI to streamline the application process could offer a glimmer of hope for overburdened consumers.
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Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
As Independent brokers, we’re seeing an uptick in secured loans. We've always championed the unique benefits of second charges, recognising their suitability in various situations where first charge mortgages fall short. Whether it’s for tax bills, business needs, home improvements, debt consolidation, or crucially, credit repair, second charges are empowering customers to advance their lives. Interbridge's dynamic entrance into the market, with their cutting-edge technology and inclusive criteria, ensures a quick, low-friction experience for both customers and brokers, and Selina's flexible HELOC product is popular amongst applicants. These shake-up the market and fosters competition, diversification, and innovation. We would like to see more credit repair products made available, essential lifelines are helping turn around tough situations, and enhancing customers’ future interactions with the mortgage market. It's a great time to be in this sector, and exciting times lie ahead.
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Philip Bailey
Director at Loan.co.uk
Here at Loan.co.uk we have seen a huge increase in second charge loans this year, with month-on-month growth, outpacing the FLA’s 14% H1 growth figures significantly.

We have seen an influx of borrowers this year who have great credit scores, zero adverse and strong incomes. All of which in the eyes of many would not fit the stereotypical second charge market. Long term fixed rates, big ERC’s, the rising cost of living, increased debt and restricted debt-to-income ratios by many high-street lenders is highlighting the value of a second charge to many who would not normally consider it.

Over the past year, many of the top second charge lenders have really stepped up to increased pressure. Many now provide better tech & propositions than their first charge equivalent. (Full APIs, e-sigs, dynamic pricing)

With c80% of seconds being used in some way to consolidate debt, the introduction of 'deferred payments' would be a welcome product evolution for many customers who need a lifeline.
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Matthew Tristram
Co-Founder at Loans Warehouse
Demand for second charges has increased in 2024, with FLA figures for May 2024 showing a 12% year-on-year rise.

Loans Warehouse, one of the UK biggest specialist second charge brokers, has seen higher demand this year as consumer confidence grows, with optimism about rate reductions prompting home improvements.

Debt consolidation remains the primary use for second charges. New entrants like Interbridge have sparked a rate war, benefiting customers with lower rates and streamlined processes. Technological advancements and dynamic pricing are becoming more common, with Pepper Money leading the way as the most advanced lender in the market.

Interbridge's launch in the last three months has intensified competition, driving positive changes.

The year is expected to see more big brand new entrants who will continue to utilise technology to value properties, remove paperwork required and automate ID checks, but expect automation to soon confirm income and replace bank statements