Second charge lending doubled in the final three months of 2020 compared to the three previous, according to Loans Warehouse
The second charge lending market is effectively at business as usual, with broker firm Loans Warehouse predicting a return to pre-pandemic volumes in the first three months of 2021.
According to the firm’s index, second charge lending doubled in the final three months of 2020 compared to the three previous, with December totalling £66.8m.
Although this was a £13.4m decrease on November 2020, Loans Warehouse said the figure was only two per cent lower than December 2019.
The 1,672 completions in December were also an 18 per cent decrease on the number in November 2020.
In a confident sign of how secured charge lending has adapted over the last 10 months, we can now confidently state it’s business as usual in lockdown three for all lenders who were active at the end of 2020 – including several who are even predicting growth at the start of 2021, it said.
We would even go so far as to continue to predict that Q1 of 2021 will see lending volume return to pre-pandemic levels as several lenders plan to release new product ranges in January and offer significant pricing decreases, the broker firm said.
Average completion time across the industry dropped to 11 days, it added.
The broker firm uses its own data and that from eight major lenders in the sector to produce its index.
Perhaps surprisingly, despite being an increasingly popular search for advisers according to Knowledge Bank, the proportion of loans being completed for debt consolidation remained unchanged at 74 per cent.
However, the criteria search engine found advisers were most commonly searching for the maximum loan to value (LTV) on second charge products.