Second charge mortgage lending grew 17% year-on-year in H1 2024, marking the fastest growth rate of any market segment, according to research from Pepper Money.
Between January and June 2024, homeowners accessed £804m through second charge mortgages, which is more than 10-times the £76m seen in buy-to-let (BTL) lending during the same period.
Homeowners took out £3.2bn via second charge mortgages since the pandemic, up 27% compared to pre-pandemic levels.
Second charge mortgages outperformed other segments, such as first-time buyer lending, which grew by 13%, and further advances at 5%.
All other segments saw a decline in lending activity during this period.
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “Make no mistake, taking out a homeowner loan is still a niche pursuit, but we’re starting to see this change as customers realise the financial firepower they have stored away in bricks and mortars.
“Without doubt, there are too many people who only think of personal loans or credit cards who might benefit from carefully considering whether a homeowner loan could be a better fit for their needs.”
McGrath added: “It’s vitally important we tackle this awareness gap, because otherwise customers will keep taking non-advised, unsecured products when they might be better served, and better off as a result, by at least considering their options more broadly and seeking advice about a secured homeowner loan.
“Bricks and mortar are an untapped resource when it comes to helping UK households pursue their financial ambitions.
“Second charge mortgages are steadily coming into their own in the post-pandemic landscape, and we fully expect this trend to continue.”
