The amount in second charges lent between January 2012 and October 2012 is significantly higher than the entire year of 2011, according to the latest Secured Loan Index from Loans Warehouse.
Lending up to 31 October, 2012 is already more than for the previous year in its entirety by £6.8 million.
Secured loan lending in October stood at £31.9 million, an increase of 1.6% on September’s figure of £31.4 million.
October is the fourth month in a row where lending has reached over £30 million.
The annual increase in secured loan lending was 38.7% higher than in the same period in 2011, where it stood at £23 million. This is the only annual increase October has witnessed since before 2009.
“The secured loan market continues to strengthen, with changes in annual lending rising rapidly as more and more borrowers are finding secured loans increasingly attractive,” said Matt Tristram, joint managing director of Loans Warehouse.
“This is due to several factors: low rates, increased product availability and the squeeze of interest-only mortgage products.
“With many high street lenders shying away from interest-only (with Nationwide announcing at the beginning of October they will no longer be selling mortgages on an interest-only basis) a huge opportunity is presenting itself to the secured loan market.
“A secured loan is a realistic option to those borrowers who are looking to raise capital but are being penalised by their mortgage lender. It has never been more important for brokers start thinking of the best solution for their clients, and the best solution isn’t necessarily the best mortgage product.
“Secured loans continue to prove themselves to be a suitable alternative to remortgaging, especially to those looking to raise capital while still protecting their interest-only mortgage. The more the first charge market digs its heels in, the more the second charge market steps up to the plate and with rates as low as 6.9%, the industry does and will continue to offer suitable alternatives for brokers and consumers alike.”