In October, the value of new second-charge lending reached £223m, up 32% year-on-year, data from the Finance & Leasing Association (FLA) found.
Over the three months to October, lending totalled £601m, an annual increase of 28%.
On a 12-month basis, lending rose to £2.045bn, up 23%.
New agreement volumes followed the same upward trajectory.
Lenders issued 4,238 new second-charge mortgages in October, a 22% increase compared with the previous year.
Across the three-month period, 11,483 new agreements were completed, up 18% year-on-year.
Over the past 12 months, the total number of new agreements reached 40,055, representing 15% annual growth.
Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA, said: “The second charge mortgage market has reported growth in the value of new business in each month of 2025 so far.
“The product is proving popular with consumers who want to effectively manage loan consolidation or to fund home improvements.
“New business volumes are expected to reach almost 41,000 in 2025 which would be the highest level since 2008.”
She added: “The proportion of new business volumes which were solely for the consolidation of existing loans held steady in October compared with the previous month at 59.5%.
“A further 22.5% were for home improvements and loan consolidation, and 11.9% solely for home improvements.
“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”
