The second charge sector continued to shake off post-Brexit troubles, with new business volumes in the traditionally-quiet August and September up 6% on 2015.

A report – drawing on data from the Finance and Leasing Association – shows that in July the total value of monthly second charge lending actually increased by 4% from £70m in June to £73m, post-Vote.

On an annualised basis, the market has consolidated at just under £900m (£889m in the 12 months to August) of gross lending after a period of prolonged growth throughout 2015. Experts say that there are several reasons why the outcome of the Referendum failed to dent an increase in second charge lending. The economic uncertainty resulting from the vote may have encouraged more borrowers to consolidate their debts, to make their payments more affordable and to avoid potential future shockwaves.

Ahead of the referendum, consumers were increasingly dependent on unsecured debt as a source of finance, with Bank of England figures showing consumer credit had risen £1.3bn month-on-month in April.

With falls in available interest rates being a feature of the market over the summer, second charges became more attractive options in July and August, and this will continue as rates below 4.5% have arrived on the market.

Can we help?

If you are looking to raise a secured loan please do contact us and one of our qualified advisers who will be happy to guide you. https://www.second-charge-loans.co.uk/contact/

Why choose second charge:

Second charge loans can be a real alternative to a re-mortgage. While every application needs to be considered on its own merits, the second charge industry has recently become far more competitive and attractive.

Why you should consider a second charge:

1. A) Keeping your existing low rate mortgage.

You may have a very low rate lifetime tracker first mortgage. Many lifetime trackers were sold a number of years ago with some lenders offering rates of 0.25% (or lower) above BBR. You may have explored the current market and it is not possible to re-mortgage to an equivalent or lower rate.

This is clearly a scenario where a second charge loan should be considered. For example, if you have a base rate tracker mortgage of 150k at a rate of 0.75% (0.25% above base rate) and want to raise £30k, it is more likely that a second charge loan is a better option than re-mortgaging.

1. B) Avoiding early repayment charges.

If you face high early redemption charges (ERC) on your first mortgage in the next 2 years.

Rather than re-mortgage and pay high (ERC’s), it may be beneficial for you to take out the required additional borrowing by way of a second charge loan. You can then consider a re-mortgage when the (ERC’s) no longer apply.

1. C) Further Advance is not available

You may have approached you existing first charge lender for a further advance, but have been unable to obtain the amount required.

The first charge lender may have declined a further advance for a number of reasons. Typically this might be due to insufficient income, adverse credit or simply because your first charge lender is no longer lending. Second charge lenders often have a different approach to assessing income and adverse credit. If a client is clearly benefiting from the loan and more importantly can afford the loan, lenders are prepared to look at individual applications on their own merits.  https://www.second-charge-loans.co.uk/contact/

Second charge on the up and rising: 

Second charge lending activity has seen a definite surge in recent months, driven by record low rates and rising house prices, which have encouraged homeowners to reconsider their finances. So much so, that the number of second charge loan transactions has risen to the highest level seen in over five years.

This highlights the level of motivation to raise capital at the moment, and our own figures back this up. Second charge lending is now a big part of the lending markets with more borrowers considering this type of loan as an alternative to a re-mortgage.  Indeed, additional figures from a survey revealed that 7.8% of homeowners in August and September this year applied for a secured loan against their property.

Since the Brexit result a pattern has emerged with homeowners looking to reduce expensive long term debt such as credit cards and unsecured lending. Homeowners are without doubt being more cautious as the immediate future is somewhat uncertain and they see reduced expenses as a major priority.

Second charge loans now have a vast array of choices so if you are considering a loan please ensure you get the right one to meet your needs both in the short and long term.

Can we help?

We have a large number of fully qualified advisers so please do make contact and we will endeavour to find the perfect solution for your needs. https://www.second-charge-loans.co.uk/contact/

Help for the self-employed
Currently, the second charge lending market offers a good alternative to self-employed borrowers, in particular for those with little track record or complex income structures. Products are out there whether the client has just one year of trading or is well established in their business.
Lenders are softening in their approach to the self-employed and Its believed the market will continue to grow in supplying products for this often underserved sector of the market.
The self-employed and, in particular, contract-type work does from time to time mean that the applicant will be between projects and, as such, income volatility becomes a factor.

There is a real case for products that allow for payment breaks to accommodate this along with perhaps the ability to overpay throughout the term without penalty. Lenders have seen the need for such plans and have incorporated deals in their portfolios which is good news for the self-employed.
There is likely to be more self-employed, freelance and limited company owners in the years to come. It is very encouraging to see the lenders taking on board this situation and acting in a positive manner. Small and medium businesses are making up an ever-increasing part of the British economy and, as such, it is imperative that this sector is supported appropriately.
Need some help?
If you would like to know more please do contact one of our qualified advisers and they will be pleased to assist. https://www.second-charge-loans.co.uk/latest-loan-info/

Second charge mortgages are being used for home improvements more and more as well as debt consolidation in 2016 the latest research has revealed.

Between January and August this year one in three (33%) second charges were used for home improvements, twice as many as a year ago, while 75% of customers used second charge for debt consolidation in 2014 compared to 36% in 2016.

Since the Brexit vote second charge loan enquiries have been increasing at a rapid rate. Reports suggest homeowners are looking to improve their current properties rather than move. Debt consolidation is high on the agenda of the majority of homeowners as unsecured debt is very expensive when compared to secured lending.

Second charge lending is growing very quickly in stature and one of its big appeals is the speed of advancement. On average a second charge loan is completed within 21 working days, this of course depends on the complexity. This financial year has seen interest rates drop to the lowest ever recorded in this field of lending.

If you are looking to raise money from the equity within your property this type of loan should be given serious consideration. There are many options open to a homeowner to raise cash including a re-mortgage and you should seek professional advice as to the best loan to suit your needs.

Need some help?

There are many different lenders offering numerous second charge loans. If you think this could assist you with your future plans please make contact with one of our qualified advisers.