May 2014 boasts the second highest lending figures since October 2009, and is 16% higher than secured lending in May 2013.
Last year it took until July to reach the quarter of a billion lending figure that this year has been achieved in May, and the figure marked the 30th month in a row of year on year growth in secured lending.
Matt Tristram, Co-Founder & Director of Loans Warehouse & Clearly Loans comments:
"There has been a clear focus on one section of the secured loan market. With several prime lenders gearing up for launch in the coming months, the focus in the last few weeks has been firmly on near prime products with lenders like Blemain, Step One, Central Trust & Masthaven having all made funding announcements, all trying to increase their market share by making significant changes to their lending criteria.
"The largest player in this space, Blemain Finance, reduced the rates on their standard and light plans to 8.7% and 8.95% on their larger loans prime plan.
"To give you an idea of the level of adverse accepted on a typical near prime secured loan plan, lenders will allow a default or CCJ in the last 24 months or a mortgage arrear in the last 12 months. Missed payments on unsecured credit tend to be dismissed as long as the item hasn't been more than 2 months in arrears in the last 12 months.
"Masthaven made the biggest changes - reducing interest rates across every single product in their range, increasing their maximum loan size to £135,000 and making several other adjusments which made their product range far more attractive to brokers and consumers.
"Finally, Step One. Their headline rate remains the same at 8.9% but they have reduced rates on the majority of LTV bandings, reduced their lending fee to now start at £495 and expanded the availability of their 95% LTV product for both employed and self employed applicants.
"There have also been some changes to the secured loans offered by several lenders against BTL properties. Whilst I believe no lender has really grabbed this market by the horns yet, the rates are coming down and loans sizes increasing.
At the start of last month, Masthaven took over from Shawbrook with the industry's headline rate of 9.45% for a secured loan on a BTL. Blemain have now slightly undercut that rate with the introduction of a 9.4% rate on their Prime Single Buy to Let plans.
"In the last few days Central Trust entered the BTL market with the launch of a new range of unregulated secured loans on BTL properties which start at 9.99% on loans from £3000 to £70,000 up to 75% LTV in England, Wales & Scotland."
With the Bank of England announcing plans to require lenders to check mortgage applications can cope with a greater interest rate rise, and limiting higher LTI mortgages to 15% of completed business, it will be interesting to see how the market and lenders with an appetite to lend react in the coming months. Secured lenders have historically looked to capitalise on gaps in the first mortgage market, which Tristram said 'could be another opportunity to get creative'.
