February 2012, which was a post credit crunch record itself, saw £26,000,000 lent in secured loans, and whilst a month on month increase in lending of £1,600,000 between January and February 2013 may seem relatively small, the year on year increase of over 21% shows the continual growth the market is experiencing.
February’s lending figure of £31,600,000 also represents the 16th month in a row the second charge market has grown year on year; this above all else highlights sustained, healthy growth.
Matt Tristram, joint Managing Director at Loans Warehouse, says:
“The figures each month are speaking for themselves. The industry is now consistently completing over £30,000,000 each month as borrowers continue to benefit from cheaper rates and more diverse options.
“The market continues to become more mainstream, with the introduction of historic low rates of 5.59% (Nemo Personal Finance), early repayment notice period of 28 days with just a £195 discharge fee and LTV’s up to 95% (both Shawbrook Bank), the second charge market is attracting the attention of some of the biggest names in the industry.”
Rob Clifford, CEO at If I Were You, told us:
“The 21% year on year hike is clearly in sharp contrast to a very gradual recovery in other parts of the lending sector - good news for consumers and the industry. Intermediaries need to continue the excellent work of raising the profile, and appropriateness, of secured loans to relevant consumers.”
Matt Tristram continues:
“The last month has again seen lenders at both ends of the market improve their product offering; Shawbrook Bank enhanced their Premier Plus range, increasing loan to values up to 85% for prime borrowers, whilst Equifinance launched Equifinance Plus, a range of products that accommodate recent mortgage arrears, defaults and CCJs within the last 6 months but at market leading loan-to-values.
It has been six months in the making and the biggest change came this past Tuesday when Prestige Finance, now part of the OneSavings Bank group, released their new product range with the additional funding that a bank brings evident for all to see.
On 14th September 2012, OneSavings Bank announced to the stock market that they had acquired Prestige Finance. Ever since then the secured loan market has been eagerly awaiting the changes this would bring and the new criteria released on 12th March has got the industry talking.
Lending rates will challenge those of the market leaders Shawbrook Bank and Nemo Personal Finance, starting at 6.75% for loans up to 70%, which over 55% LTV is the cheapest headline rate available – a statement in itself.
This is a big step for Prestige Finance and it will be interesting to see how the historically adverse lender fares in its new position over the coming months.”
Upon release of the new product Andy Golding, Group CEO at OneSavings Bank PLC, commented:
“The secured loan market is growing and we see opportunities to supply high quality products to this under-served marketplace. Prestige is known for its great broker service and, with many years of experience, is ready to become a competitive force in this area, including larger loan offerings, targeted at those first charge mortgage holders who are unable to remortgage without losing access to their current low tracker and fixed rates.”
”The new product range has been developed with input from key distributors. It is a well-priced and competitive set of products designed to provide brokers with an important new alternative source of finance in the re-emerging secured loan market.
Matt Tristram concludes:
“The new product range from Prestige Finance means for the first time in memory we have three lenders offering rates below 7% in Shawbrook Bank, Prestige Finance & Nemo Personal Finance and an amazing 27 products with rates of 9.9% or below.”
