Loans Warehouse predicts second charge lending to double in fourth quarter
Loans Warehouse has predicted 100 per cent growth in second charge lending in the fourth quarter.
The credit broker cited statistics from the Finance & Leasing Association (FLA), which showed that second charge lending stood at £107m in February, before the pandemic hit.
During the Covid-19 crisis, second charge lending dropped by 81 per cent to just £21m in May.
Since then the market has partially recovered, with lending having more than doubled in August to £43m, according to the FLA figures.
And now Loans Warehouse has forecasted this figure to double by the end of the year.
Matt Tristram, co-founder of Loans Warehouse, said he expects to see September’s figures show a rise in lending to around £50m, with October and November breaking the £80m barrier.
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“Despite the pandemic we have traded throughout the year and it is our opinion the opportunity in second charge lending has never been better than it is today,” said Tristram.
“I’m confident that August’s results be at least doubled again before the end of year.
“Despite a rocky few months for the second charge sector positivity has once again returned.”
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Tristram predicted that record mortgage lending this year will lead to increased demand for second charge products in the coming months as borrowers look to raise funds for home improvements and debt consolidation.
He cited the recent increases in lending by Optimum Credit, United Trust Bank and Oplo, which was formerly known as 1st Stop Home Loans, as leading the recovery of the second charge lending market.
“Competition between leading lenders will be the key driver which will see the second charge market double from the figures recorded in August before the end of the year,” said Tristram.
Peer-to-peer lender LandlordInvest recently reported an uptick in second charge lending to developers that have received loans under the coronavirus business interruption loan scheme.