Second charge mortgage lenders recorded an 18% increase in new business volumes for March 2025, according to the latest figures from the Finance & Leasing Association (FLA).
The data shows the sector’s growth trajectory continued through the first quarter of the year.
Fiona Hoyle, director of consumer & mortgage finance and inclusion at the Finance & Leasing Association (FLA), said: “The second charge mortgage market reported a strong end to the first quarter of 2025, with new business volumes up by 17% in Q1 2025 as a whole.”
The Q1 data revealed that debt consolidation remains the primary driver for second charge lending, with specific purposes clearly identified in the market analysis.
Hoyle added: “The distribution of new business by purpose of loan in Q1 2025 showed that the proportion of new agreements which were for the consolidation of existing loans was 58.0%; for home improvements and the consolidation of existing loans was 22.6%; and for home improvements only was 11.8%.”
The value of new business in the sector reached £168m, representing a 23% increase. With customers potentially facing affordability challenges in the current economic climate, the FLA has emphasised the importance of early communication with lenders.
Hoyle added: “As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”
