There was £146m worth of new business agreed in the second charge mortgage market in January, new figures released by the Finance & Leasing Association (FLA) have shown.

This marked a 29% jump on January last year, as 2,907 new agreements were reached, which was a 24% increase on 2024.

For the 12 months to January 2025, the FLA revealed that second charge business volumes reached £1.7bn. This is a figure up by 26% against the corresponding 12 months a year earlier, indicating increased signs of activity in the second charge mortgage market.

Director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, said: “The second charge mortgage market made a positive start to 2025, with double-digit growth in new business by value and volume.

“The distribution of new business by purpose of loan in January 2025 showed that the proportion of new agreements which were for the consolidation of existing loans at 58.5%; for home improvements and the consolidation of existing loans at 23.0%; and for home improvements only at 12.2%.”

As well as second charge mortgage lenders, the FLA’s members include banks, credit card providers, store card providers, personal loan and instalment credit providers, and motor finance providers.

Across the entire consumer finance market, the FLA said that business grew by 2% in January compared with the same month in 2024, to total £9.5bn.

An estimated £5.1bn of this came in the credit cards and personal loans sector, which was up by 1% on the same month last year.

Director of research and chief economist at the FLA, Geraldine Kilkelly, said: “Consumer finance new business provided by FLA members grew for a second consecutive month in January but at a much slower pace than in the previous month.

“Our latest research suggests that total UK new consumer credit by value will grow by 6% in 2025, with the credit card finance market increasing by 5%, both slightly lower rates of growth than in 2024.

“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”

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