More than 42,000 households are expected to take out homeowner loans in 2025, according to analysis by specialist mortgage lender Pepper Money.
Approvals for second charge mortgages rose by 17% year-on-year during the first 11 months of 2024, based on data from the Finance and Leasing Association.
The final months of 2024 saw even stronger growth, with new loans up 27% in September and 32% in October.
If this growth trend continues, the market could grow by 39% over two years, rising from 30,466 approvals in 2023 to more than 42,000 in 2025.
Pepper Money’s analysis forecast around 1.13 million housing transactions in 2025, suggesting that one new homeowner loan will be approved for every 27 housing transactions.
This increased from one homeowner loan for every 34 transactions in 2023.
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “There are very few markets where a prospective 39% increase over two years still looks like a drop in the ocean compared to its overall potential.
“Homeowner loans have been the mortgage market’s best kept secret for too long.
“As an industry, we have a significant opportunity to help more customers realise what they’ve been missing and put their property wealth to smart use to improve their finances.
McGrath added: “At Pepper Money, we will continue to invest in smarter systems and innovate with flexible lending criteria to build on the momentum we saw in 2024.
“Our service-focused culture and quicker processing times have made us the preferred choice for borrowers and brokers alike.
“Combine these developments with a Government pushing for homeowner expansion, and it’s safe to say the secured loan market is on track to charge full steam ahead.”
