The Intermediary – October 2025 - Flipbook - Page 76
S E C O N D C H A RG E
Opinion
Brokers are
thinking differently
S
econd charge lending
isn’t new, but the way
brokers are using it has
changed, and that’s
extremely telling. Brokers
are increasingly choosing
second charges, not as a product of last
resort, but as a core part of their advice
toolkit. They’re using our packaging
service more frequently and leaning
on our lender panel to find answers
for customers whose needs don’t
fit into a standard remortgage or
further advance. In short: brokers are
thinking differently.
What’s driving change?
It starts with borrower behaviour.
More customers are finding
themselves in situations where
traditional refinancing isn’t the
right answer. A growing number of
people, many of whom had previously
spotless credit records, are now facing
missed payments, defaults or rising
unsecured debts.
This is borne out in a recent report
by Grant Thornton, which shows
that average credit card balances were
on an upward trajectory throughout
2024. In fact, recent data from the
FICO UK credit card market report
shows that, despite a typical seasonal
reduction in spending, balances grew
to £1,895, 5.1% higher year-on-year.
Also, the percentage of the balance
being paid off by customers fell yearon-year by 7.7%.
Brokers are actively seeking different solutions
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The Intermediary | October 2025
In addition, the average balance
of customers with three missed
payments increased by 3.1% monthone-month and 8.1% year-on-year to
£3,300. 10.1% more customers missed
one payment compared to June 2025,
with the average balance 6.4% higher
than July 2024 at £2,385. The average
balance for customers with two missed
payments increased 6.9% year-on-year
to £2,875.
This change maers. When
customers with otherwise strong
profiles pick up the odd default or get
trapped in high-interest unsecured
borrowing, a remortgage can suddenly
look less appealing. The rate may not
be favourable, they may not want to
disturb their existing deal, and they
certainly may not want to reset the
clock on an aractive fixed rate they
fought hard to secure two or three
years ago.
This is where second charges make
sense. They allow the borrower to raise
capital while preserving the terms of
their first mortgage. That’s a powerful
proposition, especially when advice is
focused on long-term affordability and
protecting existing products.
Learning fast
We’re also seeing much greater
confidence in the market. Brokers are
not only more aware of second charge
options, but they’re also actively
seeking them out.
Our own Lisa Muscro has said
recently in The Intermediary that
“brokers are making full use of the
support on offer” from specialist
partners, and “recognising the power
of a strong packaging relationship”
when dealing with complex cases.
She’s right. Our role isn’t just about
placing cases. It’s about providing
structure, lender access, and insight.
The knowledge and experience of
our advisers allows us to select the
most suitable product from the outset
for all needs and circumstances. It’s
this support, and the outcomes we’re
EDDIE LAU
is broker account manager
at Norton Broker Services
More customers are
finding [that] traditional
refinancing isn’t the
right answer”
achieving, that explains why more
brokers are returning to us.
Whether it’s raising funds to clear
debt, invest in home improvements,
or even finance specialist purchases,
we make it simple to assess second
charge suitability and get the
right outcome.
And it’s not just our business that is
booming; the second charge market
as a whole is on a positive growth
trajectory. According to the Finance
& Leasing Association (FLA), new
business volumes grew by 15% in
July 2025, with the value of new
business reaching £201m, up 23% on
the previous year. This is the highest
level since June 2008, and not just a
reflection of demand – it’s a reflection
of beer advice.
As more brokers think beyond
the remortgage, and as more clients
find that their credit profile or
current deal means a second charge
is more appropriate, the market will
continue to grow.
We don’t see this as temporary. This
is the result of brokers broadening
their thinking, building confidence
in the options, and using packaging
partners to make second charges work.
It’s a smarter way to do business, and
it’s exactly what customers need in a
changing economy. ●
