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Second charge loans tumble by almost a quarter in April: FLA  

Second charge loans tumble by almost a quarter in April: FLA  

Second charge mortgage loans tumbled by almost a quarter in April, compared to a year ago, according to data from the Finance & Leasing Association, “as uncertainty about the economic outlook continues”.  

The body says second charge loans came in at £99m in April, a 23% fall on 12 months ago.  

The figures come as the mortgage market faces its greatest period of turbulence since the Kwasi Kwarteng mini-Budget in September.  

Last month’s higher-than-expected 8.7% inflation rate led investors to price into markets that the Bank of England base rate, currently 4.5%, will climb ‘higher for longer’ as the central bank battles rising prices.  

Many economists forecast the base rate may hit 5.5% by the end of the year. This has caused scores of lenders to pull and reprice home loans, as swap rates rise.  

Finance & Leasing Association director of consumer & mortgage finance and inclusion Fiona Hoyle says: “The second charge mortgage market reported a further fall in new business volumes in April as uncertainty about the economic outlook continued.   

Hoyle adds: “The distribution by purpose of loans in April showed 59% of new agreements were for the consolidation of existing loans, 13% for home improvements, and a further 22% for both loan consolidation and home improvements.”  

The association says that in the three months to April second charge loans hit £328m, a 15% drop on a year ago.  

However, over the 12 months to April, these loans are up 18% to £1.5bn.

The post Second charge loans tumble by almost a quarter in April: FLA   appeared first on Mortgage Strategy.

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