Tax bills and the second charge market
Second charge lenders have seen a 12% rise in mortgage activity during Q4 2018, compared to the same period in 2017, due partly to a surge in seconds being used for tax bills.
Of particular note was the fact that roughly 25% of the total loans arranged were partly or fully being used to cover self-assessment tax bills, payable before the January 31st, 2019 deadline. It’s common knowledge that the seconds market is thriving and the fact that people don’t want to jeopardise extremely low mortgage rates is certainly a key driver in this. What stood out in the fourth quarter, however, is how a far larger number of people than usual were using second charges to pay off their tax bills.
Speculating as to why it could be that a protracted period of high inflation has had an impact or Brexit uncertainty has reduced income or work flow.
The secured loan surge mirrors data from the Finance and Leasing Association (FLA), which showed the second charge market grew in December 2018 for the sixth month in a row.
The number of new agreements grew by 13% to 1,792 compared to 1,584 in December 2017, with a value of £80m — 6% higher than the £76m recorded in 2017.
Need some assistance
If you think this type of loan could assist you with your future planning make sure you get the right one to suit your needs. There are many different lenders offering numerous second charge loans so please do call our qualified advisers who will be happy to help.