Introduction
Twenty years ago, securing a mortgage meant queuing at your local bank and hoping your circumstances met the bank’s requirements.
Today, the mortgage landscape tells a dramatically different story. Specialist lenders now account for 16% of the mortgage market, up from 7% just five years ago, driven by brokers helping borrowers navigate a more complex market, but one with more options too.
Without access to or knowledge of alternative lending products, consumers often fall back on options that don’t necessarily suit their circumstances, credit cards being a prime example.
As of May 2025, there were more than 53 million credit card accounts in the UK, accounting for more than £70bn in credit card debt, an increase of 6.4% compared to 2024.
The value of credit card debt continues to rise as more people turn to credit to fund their expenses. The vast majority of credit card holders now own more than one, with nearly a third (32%) only making the minimum monthly payment.
Although not all debt is bad, credit card balances have risen significantly with the average UK adult now carrying over £1,300 in outstanding balances.
Digital spending may feel both easy and convenient, however it can mask the long-term costs and impact of taking on this type of financial commitment.
By only considering a credit card when looking to borrow for a specific life event, it can leave many homeowners overlooking alternative options that may be better for their overall financial health
Changing lifestyles, rising costs and the need to fund major life events have made more flexible lending options essential. Homeowner loans, secured against a property, offer an alternative way to consolidate expensive unsecured debt at lower interest rates and into a single monthly repayment.
Specialist lenders are therefore reshaping how borrowers access credit, creating a marketplace where customer needs, rather than lenders’ convenience, drives lending decisions. The result is an industry that doesn’t just offer more choice, it delivers markedly better outcomes for borrowers.
Pepper Money is leading the charge, introducing a suite of new products and range enhancements within the second charge mortgage space, from launching 100% loan-to-value homeowner loans to ensure borrowers can maximise equity in their homes, to no and low-early repayment charge products, with the sole aim of providing greater options and flexibility to customers.
Personalised Solutions Over One-Size-Fits-All
Traditional lenders often struggle to meet the needs of today’s diverse borrowers due to their size and regulatory requirements.
Specialist lenders, supported by brokers, are filling the gap with bespoke solutions, moving beyond the one-size-fits-all approach and even saving borrowers money in the process.
Pepper Money has found that those who consolidate with a secured loan reduce their monthly outgoings by £680 on average.
What many people don’t realise is that their property – often their most valuable asset – could hold the key to breaking free from an expensive debt trap.
Consolidation of debts can transform chaos into clarity: one lender, one monthly payment (which is normally lower than the combined monthly cost of existing debts), one clear balance declining predictably each month, while preserving the existing mortgage deal.
And should their financial circumstances change, at Pepper Money we offer a number of low and no early repayment charge products, meaning it is possible to clear the debt entirely without financial penalty.
Innovation through competition
As mortgage market competition has intensified, so too has the need to find new innovations that transform the customer experience, without letting go of the human expertise that defines our sector.
Brokers remain vital as when complexity increases, human expertise becomes invaluable to help borrowers with nuanced financial needs find the right product for them.
This is because human decision-making understands the intricacies of why borrowers might need more innovative secured loans.
Our research has indicated that a third of couples planning to marry in 2027 or beyond are planning to use loans to finance their weddings, as the shift away from traditional funding sources like family gifts and monthly incomes suggests a new reality for wedding finances.
At the same time, with Labour removing the VAT exemption on private school fees, families with children in fee-paying schools are seriously considering their financial situations.
Pepper Money data has shown that 23% of parents are planning to use credit cards to finance fees, yet opting for unsecured products, such as credit cards, at premium rates could lead parents to shelling out more than they bargained for.
Pricing pressure and service standards
The days when borrowers had to accept whatever terms their credit provider offered are long gone – today’s customers and brokers can easily compare rates, fees, and service levels across multiple specialist lenders instantly.
Credit cards are often seen as the fastest option to access credit, but that’s changing. In August 2025, Pepper Money averaged just 193 hours from application to completion, while nearly a fifth (19%) of loans were funded within 72 hours.
Competition has raised the bar across the sector. Lenders must now offer responsive service and streamlined processes if they want to keep doing business.
At Pepper Money, we’re incredibly proud of our 5 star Trustpilot rating, driven by innovations in customer experience, including dedicated relationship managers and streamlined processes that eliminate unnecessary delays.
And with the introduction of Consumer Duty, lenders are increasingly transparent when it comes to pricing, ensuring customers get better value for money, as well as an increasingly customer-centric lending experience.
The seconds market is one that continues to grow, with year-on-year new business volumes up 24% in July 2025.
Thanks to such market growth, the industry has become much more customer-centric, where brokers and the borrowers they represent can benefit from innovation, personalisation, and competitive pricing.
At Pepper Money, we welcome competition. It drives us to do better, continue to innovate and enhances our mission to increase consumer awareness of all financial options available to them.
