Secured loans up by 11 per cent month on month

The number of home owners taking out secured loans rose by almost 11 per cent in February, month on month, from 2014, according to figures recently released in the Loans Warehouse index.

More precise figures show an increase of 10.7 per cent, month on month, with a total of £58.2 million in February 2014 to £64.4 million in February of this year.

Demand for secured loans increased dramatically during the first two months of this year, with 18 per cent higher levels of lending in January and February than in the whole of the first quarter in 2013.

Gross second charge lending, year on year, is up by 36 per cent, performing better than any other area of consumer credit.

However, demand for second charge lending for property purchases declined during the first quarter of 2015. The most recent Bank of England Credit Conditions survey shows that the drop in the number of borrowers applying for second loans for house purchases, has been significant during the first three months of this year, but lenders are optimistic that demand will increase once more during the second quarter of 2015.

Matt Tristan, director and co-founder of Loans Warehouse, said that the figures for February show that demand for second charge lending is strong. Whilst the figures for secured loans for mortgages are lower, it is evident that secured loans are more and more likely to be offered by brokers to clients.

Lenders who have stuck with first charge lending since the sector began to recover in 2013 are returning to the second charge marketplace. Buy to let lender, Paragon, relaunched into the market last year for the first time in five years and Precise launched its own product at the end of 2013.