Secured loans set to have another record year

The Secured Loan Index has reported that for an incredible 23rd month in succession, September saw secured lending grow year on year.

Related topics:  Specialist Lending
Amy Loddington
16th October 2013
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Second charge lending is already up 4.16% on 2012 and, as we enter Q4, the new entrants are now starting to announce themselves. The prediction is that lending in 2013 will total £480,000,000 which will mark the strongest year since 2009.

Matt Tristram, Director of Loans Warehouse & Co-Founder of Clearly Loans comments:

“Just as the Index was released last month, Masthaven Secured Loans reduced rates across the range, introducing their lowest rate to date of 9.95%, with a maximum loan of £100,000. Equifinance, the sub-prime secured loan lender, reduced their monthly interest rate from 1.95% to 1.60%, whilst increasing their maximum loan on their higher LTV products.”

“Despite recent departures in the ranks at Nemo the lender set minds at rest with significant rate reductions across their already market leading range and the introduction of a new plan for larger loans ranging from £75,000 to £200,000.”
 
“As a result of additional funding, Norton Finance significantly reduced rates whilst increasing their maximum loan on their headline products, taking the maximum loan offered by one of the longest established lenders in the UK to £50,000 at 9.9%. Additionally they have also increased the use of AVMs up to 70% LTV and simplified proof of income for self-employed applicants, a trend others are following. Shawbrook Bank now class professional self-employed applicants in the same bracket as employed, removing the 1% loading that would have been previously incurred and now only asking for the most recent SA302 instead of the last two.”

 
“As the frustrations over valuation times continue, Shawbrook Bank updated their criteria with the introduction of drive-by valuations accepted across the range, including their high LTV products. Prestige Finance have also acted with the well published introduction of AVMs to 65% LTV for loans up to £50,000, whilst at the same time increasing LTV on their prime plan to 80%.”

Loans on BTL products have also continued to improve with Shawbrook Bank’s market leading product increasing LTV to 70%, whilst reducing the risk score and minimum property value and increasing the acceptance of adverse credit, all showing a strong desire to lend more in the sector. Masthaven Secured Loans have also reduced rates across their BTL range, and now start at 10.95%, with a maximum loan of £80,000. 

Last but not least, after reporting a successful launch, Clearly Loans director Sam Busfield announced last week that the lender has increased the maximum loan from £30,000 to £50,000 whilst reducing the minimum valuation at 85% LTV to £100,000, along with a couple of niche areas including the acceptance
of properties with solar panels, an area most secured lenders avoid.
 
Paul Stringer, Loans & Mortgages Director, Norton Finance, spoke about the new funding line:

“I am pleased to say we have now secured the new funding we have been working on for a large part of this year. The additional funds have allowed us to make substantial improvements  to the criteria including cheaper rates, higher loan sizes, improved  criteria and rates for self employed customers and relaxed criteria for our cheapest plan. There have also been many improvements in other areas of the criteria that will make it even easier to complete a loan with Norton, including now accepting AVMs up to 70% LTV. ”

“With the current difficulties brokers are experiencing where full valuations are taking sometimes weeks to complete this should be a welcome change that will further help improve the timescales to completion.”

If that wasn’t enough for 31 days, the market has also seen the introduction of two new lenders, Firmus Secured Loans & FinSec. The former  has been in the pipeline since the end of 2012 with the appointment  of former  Swift Advances’  Head  of Sales Zena Campbell  and is targeting customers with a credit profile that , the new products offer something new and improved to clients whose credit profile  may not be perfect prior to the last 12 months, including loans up to £100,000 at 75% LTV.

Simon Carr, Director of Secured Loans, at Precise Mortgages commented:

"Precise Mortgages currently offers mortgage and short term lending products exclusively through intermediary partners. The move into the secured loan market is a natural progression for us. We have seen consistent growth in the market over the past 2 years, which is set to continue. The availability of this product is becoming more and more valuable to the mortgage broker; by entering this market we aim to increase the awareness of the benefits and importance of brokers offering secured loans as a viable solution  for their clients.

"Our residential and Buy to Let secured loans will be competitively priced and will benefit the growing numbers of borrowers who want to raise money without refinancing their existing mortgage. We have carefully selected a number of Master Brokers who will exclusively distribute our products to the market."

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