New business volumes in the second charge mortgage market declined by 2% in April, the first annual fall since November 2023, new figures published by the Finance & Leasing Association (FLA) have shown.

The number of new second charge mortgage agreements reached 2,897 in April, 2% down from April last year.

However, the value of this new business totalled £148m across the month, which did still represent a 7% increase on April 2024.

Over the year to April 2025, the FLA revealed that £1.83bn in new business has been agreed in the second charge mortgage market, up 24% on the corresponding period a year earlier.

“April saw the second charge mortgage market report its first fall in new business volumes since November 2023 as consumer confidence about the economic outlook dipped,” commented director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle. “In the first four months of 2025, new business volumes were 12% higher than in the same period in 2024.

“The distribution of new business by purpose of loan in April 2025 showed that the proportion of new agreements which were for the consolidation of existing loans was 55.0%; for home improvements and the consolidation of existing loans was 24.1%; and for home improvements only was 13.3%.”

Members of the FLA from across the consumer finance sector include second charge mortgage lenders, banks, credit card providers, store card providers, personal loan and instalment credit providers, as well as motor finance providers.

Latest FLA figures have also shown that across the whole consumer finance sector, new business grew by 1% in April compared with the same month last year. Through the opening four months of 2025, new business in this market has been 4% higher than in the same period in 2024.

The credit card and personal loans sectors together reported new business in April 2% up on the same month in 2024, while the retail store and online credit sector reported a fall in new business of 7% over the same period.

Director of research and chief economist at the FLA, said: “The consumer finance market reported modest new business growth in April as higher vehicle excise duties took effect, and consumer spending power was hit by higher energy, telephone and water bills.

“The FLA’s Q2 2025 industry outlook survey results were in line with the previous quarter as 80% of consumer finance respondents expected some increase in new business over the next year despite subdued consumer confidence.

“The prospect of further cuts in interest rates, strong consumer savings, and the potential for growth as the UK transitions to greener assets should contribute to single-digit new business growth by value over the next 12 months.”

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