Second Charge Mortgages

Secured loans are taking off!

Demand for secured loans jumped by 26% in April as homeowners take advantage of record low interest rates and rising house prices. But this was no flash in the pan. Demand for the 12 months to April rose by 24% suggesting strong growth in this lending sub sector.

These figures are reported by the Finance and Lease Association (FLA) whose members include banks, credit card providers, store card providers, second-charge mortgage lenders, motor finance providers, personal loan and instalment credit providers.

The FLA forecasts that new consumer lending is likely to grow by 7% in 2015. Whilst this confirms growing consumer confidence, thanks to rising employment and income growth, new lending for secured loans is comfortably the fastest growing sub sector. The next fastest growth area is car finance.

The average secured loan is £30,000. Homeowners are using new borrowings to finance home improvements, such as adding a new room or conservatory. Or a new roof or drive.

Residential building firms have full order books for at least a year! Homeowners are taking advantage of their improved ability to borrow at affordable rates to add significant value to their homes.

And why wouldn’t you invest in your home, your biggest asset? UK house prices increased by 10.0% in 2015 and the Centre for Economics and Business Research (CEBR) forecasts further rises of 1.5% in 2015 before accelerating to 2.3% in 2016 and 4.3% in 2017.