Overall secured loan lending in 2012 currently stands at £327.1m - this is the highest level since 2009, where overall it stood at £566m. Second charge lending advanced to £34.3m during November. This was a 7.5% increase on the £31.9m lent in October and a 22.5% increase from £28m in November 2011. November is the 5th consecutive month where lending has been over the £30m mark, evidence of how the secured loan industry has stablised since the credit crisis.
Highlights of the year are below.
January:
- Secured loan brokers predict an increase in lending for 2012
- Blemain continues with its commitment to charity and donates to the Royal Manchester Children’s Hospital
- Evolution Money extends its lender panel
- Financial Reporter launches its 2012 awards and includes four headlining categories for the secured loan market
February:
- Secured loans return to Northern Ireland through Evolution Money
- Mortgage Strategy holds its annual awards ceremony at Grosvenor House and the awardfor Best Specialist Broker is scooped by a secured loan broker for the very first time
- Specialist lender, Equifinance enters the secured loan market
- First European Securities launches exclusive larger loan product offering
- Masthaven announces its move into the secured loan arena
March:
- Shawbrook slashes loan rates to a post credit crunch low of 6.9%
- FLA reveal second charge repossessions are down 19.5% in Q1, compared with Q1 2011
- Central Trust launches a new loan sourcing system
- Nemo Personal Finance raises over £6,500 for the diabetes charity, JDR
April:
- Consumer credit grows for 4th consecutive month - up 9% on Apr 2011, say the FLA
- Gopher Money trebles force in light of secured loan resurgence
- Financial Reporter announces its award winners with Blemain scooping the award for Best Specialist Lender 2012 and Shawbrook wins Best Secured Loan Lender 2012. Loans Warehouse picks up both broker awards
May:
- First time secured loan lending is over £30m since December 2009
- Unlimited LTV lender, Evolution money, completes its first secured loan in Northern Ireland
- First European complete their biggest loan to date
June:
- During the past 6 months, secured loan lending totals £150m despite the UK’s difficult economic backdrop
- Nemo re-launches its one unit plan, a product that hasn’t been offered by Nemo since the credit crunch
- The FLA reveals consumer borrowing second quarter is in the up 7% compared to the same period in 2011
- Spring Finance increase maximum loan size to £50,000
- Repossessions in Q2 are compared to Q2 2011, says the FLA
July:
- The Secured Loan Index launches, analysing figures released by the UK secured loan lenders and provides the industry with an overview of the secured loan market up-to-date
- Shawbrook enhances its lending criteria and in turn, offers a viable alternative mainstream re-mortgaging
- Blemain reports a 40% rise in BTL second charge lending
- Secured loan lending in July sees biggest monthly increase since November 2011
August:
- Masthaven Secured Loans officially launch into the market and writes its first loan with Colonial Secured Loans
- The Secured Loan Index reveals that 50% more lending has been carried out compared with August 2011
September:
- One Savings Bank acquires the UK’s longest established secured loan lender, Prestige
- Blemain Group announces £640m of new funding to fund existing business and promote growth
- The Secured Loan Index reveals that second charge lending in Q3 hits £100m
- Central Trust introduces electronic ID verification and removes redemption figures under 70%
- Second charge repossessions are down 26% in Q3 compared to Q3 in 2011, reveals the FLA
October:
- Nationwide pulls its interest-only products and presents a huge opportunity for the secured loan market
- Shawbrook Bank increases its loan size to £200k, with rates from 7.5% on its Platinum plan
- Secured loan lending already surpasses 2011 levels
- Equifinance launches secured loan fund, aimed at the high net worth investor market
- Shawbrook Bank celebrates its first Birthday
November:
- Shawbrook introduces its Premier Plus Product for high net worth clients and makes improvements to Shawbrook 3
- The London Mortgage Business Expo 2012 includes several exhibitors from the secured loan market - a telling sign of how well the market is doing.
- The Biggest Ever Secured Loan Giveaway is launched
- Natwest & RBS withdraw its interest-only products; Shawbrook Bank react by increasing its interest-only LTV up to 75%
- Fluent money launches an iPhone app to help clients to track the progress of their loan in real time
December:
- Masthaven Secured Loans achieves its largest secured loan to date
- Loans Warehouse completes its first loan on Shawbrook Bank’s new Larger Loan plan
Matt Tristram, joint managing director of Loans Warehouse says:
“Shawbrook announcing its new strategy to attract more sophisticated individuals to the market unsurprisingly had an impact on November’s figures.
“We’ve definitely seen an increase in enquiries from high net worth borrowers over the past few months and attracting these individuals provides evidence the secured loan sector is definitely maturing.
“Not only that but the lending levels the Index has highlighted so far clearly demonstrates how much the second charge market has stablised. We have had uninterrupted levels of over £30m for five straight months now and demand for secured loans has remained relatively consistent. The key to recovery is a stable market and compared to the irregular 2011, I think it’s reasonable to say that the current market is in excellent health.
“Over these last few months, awareness of secured loans has increased substantially- especially among brokers. This was a key challenge when we first launched the Index and so it is encouraging that more mortgage networks are ensuring they’ve a secured loan offering through a master broker.
“Secured loan awareness has certainly grown but it is clear that there is still a lot more to do. Raising general awareness among brokers is all well and good but brokers need to fully understand the benefits of secured loans first so that they can deliver well-informed advice to their clients.
“All in all, this year has been a great year for the secured loan industry but I believe 2013 will be the year. Improved confidence in alternative lending and continued innovation from the lenders should be a huge impetus on the market in thecoming months and drive the second charge lending market further forward in 2013”
Luke O’Sullivan, New Business Manager at Equifinance, commented on 2012 in the secured loans industry:
“2012 has definitely seen a resurgent second charge lending market, buoyed by new entrants early in the year providing niche products that add to those already available from the existing lenders and enabling intermediaries to help more customers than in previous years.“Equifinance has lent in excess of £1.5 million this year, and plans to quadruple this in 2013. With multi million pound funding secured via a mix of private investors and the successful launch and first close of the Equifinance Loan Fund we are looking forward to supporting even more intermediaries next year."
Maeve Ward, Head of Sales - Secured Lending at Shawbrook Bank, comments:
“Shawbrook Bank have been very successful in 2012 and have very ambitious growth plans for 2013. Our key partners are at the heart of everything we do and we will continue to work closely with them to develop new, innovative products, systems and processes to strengthen our position in the market and assist with what has been continual growth in 2012.
“The New Year will see more secured loan providers entering the market, which will spark healthy competition and in turn provide consumers with a wider choice of products. The secured loan market is an exciting space to be in right now and the future is bright.”
Stuart Aitken,Chief Operating Officer at Masthaven Secured Loans comments:
“We could not possibly be happier with the response since we entered the market. In a sector that is looking forward to an increasingly positive future, specialist secured brokers have been universally supportive of our initial product and service. Volumes are steadily increasing and, having already passed our first £1m of total lending, I expect us to hit our first million pound month early in the New Year.
“Whilst the implementation of changes brought about by the new regulatory regime that is just around the corner will be challenging, even for those of us who are already FSA authorised, there are many potential positives in the harmonisation of secured lending with first mortgages as a result of the MMR. The secured lending community is already demonstrating that a range of second mortgage options is vital to the consumer, and I look forward with keen anticipation to 2013.”
Paul Stringer, Director, Norton Finance comments:
“Many of our lending partners have been discussing the positive changes to criteria they intend to make in the New Year; these changes are likely to be both an improvement in interest rate for some lenders and an expanding of criteria for others. This has been combined with more upbeat conversations around the interest funders may have in the second charge industry next year.”
