Second charge brokerage Loans Warehouse is predicting an 100% growth in second charge lending in the final quarter of 2020.

In February, prior to the COVID-19 pandemic, second charge lending stood at a total of £107m.

However, this figure had declined 81% by May to just £21m.

mortgage products drop

Second charge new business down 52%

Since then the market has recovered somewhat with lending having more than doubled in August to reach £43m.

Matt Tristram, co-founder of Loans Warehouse, said: “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.

“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.”

Tristram predicts that increased demand will also see many borrowers turn to second charge products in the months ahead to raise funds for the home improvement boom and debt consolidation. 

Tristram added: “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.

“I expect to see September’s figures show a rise in lending to around £50m with October and November breaking the £80m barrier with ease.”