Value of second charge mortgage market drops 46% in January

The second charge mortgage market saw a 46% annual drop in the value of new business during January, new statistics published by the Finance & Leasing Association (FLA) have revealed.

Figures showed that 1,302 new agreements were made during the month, totalling a value across the market of £56m.

The FLA’s figures also showed that in the three months to January, a total of £193m of new second charge mortgage lending was recorded, reflecting a 38% fall from the same period 12 months earlier. This was made up of 4,685 new agreements, which also represented a fall of 31% from last year.

In the 12 months to January, new lending totalled £680m to reflect a 46% fall from the same period a year earlier, and the FLA revealed this total of lending was comprised of 16,243 new agreements.

“The fall in new business volumes in January is not surprising given the lockdown restrictions currently in place,” commented FLA director of consumer and mortgage finance and inclusion, Fiona Hoyle.

“We expect demand in this market to increase significantly during 2021 as consumer confidence improves.”

Last year, FLA members provided £113bn of new finance to UK businesses and households, with £86bn of this in the form of consumer credit – representing over a third of total new consumer credit written in the UK in 2020.

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