In February this year, the second charge mortgage market reported its strongest rate of new business volumes growth since May 2017, increasing by 24% when compared to February 2018, figures published by the Finance & Leasing Association (FLA) revealed.
This trend continued when looking at the figures on a quarterly basis, with new business volumes increasing by 19% in the three months to February 2019, rising to 5,900. In the year to February, there were 24,249 new deals written, almost a 10% increase year-on-year.
By value, the 2,163 new agreements were worth £98m, representing a 20% growth on the figure published in February 2018. However, while February saw significant growth, the increase in value in the three months to February 2019 was not as great, rising by 13% to £264m when compared to the same period last year.
Commenting on the figures, FLA head of consumer and mortgage finance Fiona Hoyle said: “The popularity of second charge mortgages continues to grow as people opt to improve, rather than move.”
Furthermore, the FLA identified that overall consumer finance new business grew by 1% in February, when compared to the same month last year, with the total value recorded at £7.2bn.
Retail store and online credit grew by 6%, rising to £664m, while the personal loan and credit card finance sectors together reported a drop in new business of 4%, falling to £3.7bn.
FLA head of research and chief economist Geraldine Kilkelly said: “The consumer finance market has seen modest growth in new business overall since November as confidence about the economic outlook has weakened.
“We continue to expect low single-digit new business growth in 2019 as a whole if uncertainty about the outlook for the UK economy reduces.”
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