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Is the second charge market doing well or not?

Journalist: Jake Carter, Mortgage Introducer

ended 29. September 2023

Together have said second charges are on the up, but the latest figures show they are not.

How is the second charge market fairing at present?

What are the current trends in the second charge market?

What are your expectations for the second charge market over the remainder of the year?

3 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
We are seeing more interest in second charges. With any client on a decent fixed rate, remortgaging to borrow extra is not an option, and further advances may not lend enough based on affordability calculations. Additionally, with some clients looking to stay put and improve rather than move home, secured loans for home improvements are increasing in popularity. Lastly, as more households are accruing credit card debt to keep afloat in this cost-of-living crisis, it won't be surprising when many look to consolidate debts onto their mortgage and spread the debt over the longer term to help with the monthly outgoings.
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Gary Bush
Financial Adviser at MortgageShop.com
We have found 2023 to be the year that the Second Charge lenders made the level of transactions completing worse for themselves. These facilities are supposed to be less complicated, much faster, and less draconian - this year they have failed on all points and these lenders have well and truly missed the boat in capitalising from the market chaos that has occurred with the first charge market. Add to this the fact that when the market has dictated that rates decline these deals have been last in the queue for these decreases, this doesn't make for good reading does it? Our expectations for the second charge industry is that they learn from 2023 and take a good long look at their operations or they will never get the traction that this sector of the industry needs.
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James Bull
Mortgage Broker at JB Mortgages
Second charge mortgages are a key part of lending, they used to be for sub prime mortgages but are becoming a lot more mainstream. You can have higher income multiples than a main mortgage which allows scope for borrowing more than otherwise would be possible. Also many people have their main mortgage on a very low fixed rate which they would not want to lose - a second charge means they can keep this rate. Also as always second charges do have scope for adverse credit lending which is the more traditional angle.