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Second charge lending sees 24% growth
January 2025 marked a strong start for the second charge mortgage sector, with new business showing growth both in terms of value and volume. According to the latest data from the Finance & Leasing Association (FLA), second charge mortgage lending surged by 24%, reflecting a positive trend in the market.
In total, 2,907 new agreements were signed in January, amounting to £146 million in new business. This represents a 29% increase compared to the same period in 2024.
Impressive growth across the board
In terms of volume, the data reveals that lending increased by 19% in the three months leading up to January and over the 12-month period before, with 36,267 new agreements completed during the year.
Insights from the Finance & Leasing Association
Fiona Hoyle, Director of Consumer & Mortgage Finance at the FLA, shared her views on the market's performance: “The second charge mortgage sector has kicked off 2025 with strong growth, reflecting a healthy demand for this form of lending. The double-digit rise in both value and volume suggests that second charge mortgages are becoming an increasingly attractive option for homeowners seeking flexible financial solutions."
Loan purpose breakdown
The distribution of new business by loan purpose in January 2025 showed that 58.5% of new agreements were for debt consolidation, 23% were for both home improvements and debt consolidation, and 12.2% were for home improvements only.
This growth shows the role of second charge mortgages as a versatile option for homeowners looking to manage their finances and improve their properties.
