The Intermediary – May 2025 - Flipbook - Page 26
S E C O N D C H A RG E
In focus
Why is the second
essential to
I
’ve seen this headline wrien
by second charge brokers
many, many times – so why
is this different? The answer
is simple, the market is
different. The landscape for
mortgage brokers, the need to use
second charges, and the increased use
of product transfers have all changed
the game.
The fact is, secured loans are
becoming increasingly vital for the
modern mortgage broker. That’s why
Loans Warehouse’s services are more
in demand by brokers than ever.
Sustained growth
In February 2025, second charge new
business reached £156m – up 20%
year-on-year. Over the three months
to February, lending totalled £431m –
a 27% annual increase. Across the 12
months to February 2025, the market
hit £1.78bn – up 26% on the previous
year. Looking ahead, lending volumes
are confidently predicted to exceed
£2bn in 2025.
New lenders with strong brand
recognition have entered the market,
and major acquisitions are reshaping
the landscape. ClearScore has acquired
Aro, while TotallyMoney was recently
purchased by Intelligent Lending
Group – the parent company of second
charge broker Ocean Finance.
These deals are expected to boost
the mainstream visibility of secured
loans, with potential TV advertising
campaigns on the horizon. This added
exposure will help educate consumers
about their options, and is likely to
drive demand even higher.
Mortgage landscape
According to UK Finance forecasts,
product transfers are set to increase by
13% this year, totalling £254bn.
Given the average UK mortgage
size of £206,384, this equates to
around 1.23 million customers
refinancing – many of whom won’t
be raising additional funds through
traditional remortgaging.
With higher interest rates and
tighter affordability criteria, many
borrowers are reluctant to disturb
competitive first charge rates
secured during the historically low
interest period.
Instead, they turn to second
charge loans to raise capital without
affecting their existing mortgage
terms. This shi is transforming
second charge lending from a niche
MATT TRISTRAM
is MD at Loans Warehouse
product into a mainstream financial
solution. Secured loans will become
an essential solution for these clients.
If brokers and networks don’t offer
them, customers will naturally seek
alternatives through comparison
sites like MoneySuperMarket and
Money.co.uk, losing out on potential
revenue and creating competition
for themselves.
Accelerating demand
A combination of economic pressures
and consumer needs is driving this
increased demand:
£1.78bn
£431m
£156m
Second charge new business as of February 2025
10
The Intermediary | February 2025
Lending total over the three months to February 2025
Market total in the 12 months to February 2025
