The amount lent in October was 130% of that lent 12 months ago, more than double that lent in October 2012 and the highest single-month figure since October 2008. With October’s figures, the secured loans industry has now surpassed the total amount lent in 2013.
Sam Busfield, Co-Founder & Director of Loans Warehouse comments:
"There is no doubt that the industry has continued moving in the right direction. The ceaseless increased competition between lenders has led to interest rates once again reducing and additional products being brought to market – good news for all concerned.
"As brought to you in July's Secured Loan Index, Shawbrook have revamped and improved their offering with the introduction of their new Base Rate Tracker (which has rates starting from 4.99% above base) and Super Premier Plus (offering lower rates up to 90% LTV) products.”
As well as increased loan sizes, Shawbrook have reduced the minimum loan required to qualify for their Platinum product range and have removed the self-employed interest rate loading, thus enabling more consumers to benefit from the reduced rate. Their view on unsecured arrears has been modified, Shawbrook Two (the plan designed specifically to assist consumers who have had an unforeseen circumstance impact their credit) has been redesigned and their new DJ system has continued to be refined; no doubt there will be further improvements in the near future. All are signs that Shawbrook are determined to maintain traction in the prime and near-prime sectors.
The last month has also seen Prestige Finance reduce their headline rate to 5.29% and, in the middle tier Central Trust have reduced their rates, increased their maximum loan size and removed the lender fee from all plans, whilst making improvements to their acceptable income and property type rules.
The continued reduction in interest rates, from both a consumer’s point of view and an intermediary’s point of view, is never going to be anything other than ‘good news’, says Loans Warehouse.
However, as the market becomes more and more competitive, lenders are moving away from simply reducing their interest rates and have started to concentrate more on other aspects – loan sizes, LTVs, fees, ease of use, significant investment in IT systems – and, again, this is ‘fantastic news’ for both consumers and intermediaries.
The competition between lenders is what the Secured Loans Index calls a ‘significant benefit to our industry’.
Busfield continues:
“Under FCA regulation, secured loans are Regulated Mortgage Contracts. That (hopefully) means being regarded by the wider financial markets on a par with first mortgages – and this opens up a whole host of opportunities for us and our customers.
Being viewed as a regulated, professional industry offering genuinely viable alternative options to consumers is exactly where we are headed. We are all hopeful that over the coming months and years we will grow as an industry and that the lenders will continue to be creative with their product offerings – whilst continuing to be competitive.
“It’s for us to prove to our financial services colleagues that what we offer and how we operate is professional, with the consumers at the very heart of it.
“Anyone else thinking that 2014 is going (has gone!) incredibly quickly? Well, I certainly do. I put it down to the increased positivity in our industry.
“When you’re not busy and spending time twiddling your thumbs, then it’s likely the reason is you’re either not working hard enough (!) or business is slow. Although it took time to get going again, our industry has gone from strength to strength since the deepest, darkest days of the recession and that’s something we should all be proud of.
“Time may be going quicker, and the short days and long nights may be well and truly upon us, but I would much rather that than be worrying about the survival of our sector. And anyway, when it’s cold and miserable outside, it generally means… time to go skiing!”
