Second load of new mortgage business up 48% in April: FLA
The volume of new second mortgage business increased by 48% in the year to April 2022, according to the latest figures from the Finance and Leasing Association (FLA).
The total number of new deals in April was 2,802, worth £127m, a 54% increase on the previous year.
Of the new deals, 53% were for consolidation of existing loans, 16% for home improvements, and 25% were for both loan consolidation and home improvement.
However, on a monthly basis, the figure represents a decrease from 3,058 new deals, worth £139million in March.
For the three months to March, 8,520 new second charge deals were completed, worth £385million.
The numbers rose for the 12-month period to March 2022, with 29,432 worth a total of £1,285m, representing an 83% increase in value over the previous 12 months.
Commenting on the latest new business figures for the second mortgage market, Fiona Hoyle, FLA Director of Consumer and Mortgage Finance and Inclusion, said: “The second mortgage market has recorded another strong performance in April, with annual new business volumes just 4% below the pre-pandemic peak.
“Of the total number of new agreements written in April, 53% were for consolidating existing loans, 16% were for home improvements, and another 25% were for both loan consolidation and home improvements. “
Meanwhile, Freedom Finance chief commercial officer Andrew Fisher said the current economic environment could create a growth opportunity for second-tier mortgage lenders.
“The second mortgage market continues to show continued growth and we expect this to accelerate throughout the year as people look to capitalize on real estate equity following the surge. real estate prices during the pandemic.”
“As the cost of borrowing rises and household budgets are tight, debt consolidation is likely to be another major theme in the current inflationary shock, and second mortgages may be a timely and favorable to erase or reduce existing debts.
“Given the recent increase in interest rates and potential further hikes from the Bank of England, those with longer term solutions may be reluctant to remortgage as they would likely switch to a higher rate. expensive and could also face hefty Prepayment Fees – second mortgages meet the needs of these customers very effectively.