Improving on an already groundbreaking April (where lending broke the £40 million barrier for the first time in over three years), May has shown a 4.80% month-on-month growth.
Secured lending is now up nearly 50% on this time last year, having reached £186m versus £126m.
Matt Tristram, Director of Loans Warehouse comments:
“The accurate figures shown in the Secured Loan Index prove that lending continues to grow for this sector. This is in part due to the wider audience the industry is attracting.”
“It’s well documented that lenders like Shawbrook, Nemo & Prestige Finance have greatly increased their maximum loan sizes in recent months to attract high net worth borrowers, the significant growth of the BTL secured loan continues to gather pace; it’s reasons like this, along with record low rates, that have seen greater media coverage for the sector.”
“In recent months some high profile publications have caught on to the growth of secured lending. Loans Warehouse, along with Robert Sinclair, contributed to an article in Moneyfacts on how secured lending is ‘Filling the void’ and this month has seen the UK’s biggest selling mortgage magazine, What Mortgage, running the cover story ‘Secured loans – what are they?’ featuring some of the industry’s leading names.”
Stuart Smith, Sales Manager at What Mortgage, was asked why they have chosen to put more focus on secured lending:
“What Mortgage has seen a growing number of consumers investigating the benefits of acquiring a secured loan. For one that already has a mortgage with a need to borrow more money, then a secured loan could be a welcome alternative to remortgaging and releasing equity. Secured loans can work out cheaper than remortgaging for some homeowners, who could face stiff penalties to exit short-term, low-rate deals. Mortgage lenders are also tightening their belts in the wake of the credit crunch and market reviews, meaning that low-cost remortgage deals are becoming much harder to find. What Mortgage decided to cover this aspect of the financial markets in a Round Table session in its June issue, bringing together a select group of industry experts to discuss and highlight the benefits that secured loans can provide to consumers, in a way that consumers can fully understand and appreciate.”
Whilst the talk of new lenders continues to gather pace (and Loans Warehouse predict at least 3 new entrants to the market in Q3), existing lenders strive to make improvements to their product range and customer journey. The latest to announce such changes is Central Trust.
This past Monday Central Trust announced a fleet of improvements to their lending process, which included an increased tolerance of mild adverse credit, consideration will now be given to borrowers in receipt of CSA or court appointed maintenance and increased LTV on higher value properties.
The biggest changes were to the way income would be calculated and the ability to lend on more properties with non-standard construction; this will open up their product to many borrowers who have found restrictions on such properties very limited by high street lenders in recent years.
Loans Warehouse asked Buster Tolfree, Lending Operations Manager at Central Trust why the changes were made:
“A core component of how Central Trust operates is to identify our target consumer needs, and then offer a service and product range that matches those requirements. The criteria and packaging changes which we have recently announced have been based on valuable feedback from our introducers, and from our understanding and experience in the wider second charge market. By making these amendments we will be able to provide an enhanced service to our introducers, with the end consumer benefiting as a direct result”.
Matt Tristram concludes:
"Individually five lenders recorded record months in April 2013 and all have an appetite to lend.
Lenders continue to announce new funding lines with Equifinance & Evolution the most recent, house prices continue to grow albeit modestly with the Nationwide House Price Index stating the price of a typical home increased by 0.4% in May and was 1.1% higher than May 2012. These are just some of the factors which suggest a positive outlook for secured lending for the foreseeable future."
