The second charge market to achieve modest growth this year
The second charge industry has predicted for there to be a small, gradual increase in the volume of business this year.
To grow the market they called for more product innovation and education so more brokers see seconds as an option for clients.
Liz Syms, owner of Connect for Intermediaries, said: “It’s still overall a relatively small percentage of the market and I think it’ll still remain a small portion but there’s room for growth and continued education.”
Buster Tolfree, commercial director at United Trust Bank, added: “I still think there’s a general not full acceptance of seconds. I’m not saying advisers don’t consider seconds alongside a remortgage but as long as there’s an opportunity to opt out of it I don’t think there’ll be widespread acceptance.
“Also, this might just be the market. There’s been some growth but not a big bang in growth. Maybe we should accept that if the first charge market is £270bn, the second charge market is about £1.1bn.
“But I think they’ll just be a bit of organic growth. Advisers should mention it more. It’s appropriate where it’s appropriate.”
Jon Sturgess, head of sales at Masthaven Bank, said: “I think it’ll grow healthily.
“We’ve done some roadshows and feedback is quite encouraging that people who haven’t thought about seconds before and didn’t know they could do that, then see the opportunity. There needs to be this constant flow from people in the industry.”
Stuart Johnson, head of sales and marketing at First Choice Finance, said if there is improved knowledge and education you can make the market grow.
He added: “If we don’t do something different then I can’t see the market doing anything but staying flat.”
Tolfree said that Brexit brings another opportunity for seconds as when fewer people are moving house people tend to do home improvements, something that seconds can be used to fund.
He said: “I think our sector is one of the areas that potentially has the least impact from Brexit.”
James Briggs, specialist distribution manager at Precise Mortgages, said that more clients have been taken out of the 2-year remortgage scale, with 5-year fixes more popular than ever, so there will be a lot of business from capital raises.
Briggs added: “The product transfer market last year was £150bn. There’ll be a big pool of clients who’ll need a capital raise, can’t get a further advance and it doesn’t make sense to remortgage, so that could give us an injection over the next 12, 18 months.
“And the high street is shying away from debt consolidation which will further boost figures.”
Catherine Beaumont, mortgage and protection consultant at London Money, said: “I don’t know how much the market will grow but I think we need more education with advisers and clients. We just need more products and rates out there and more brokers to consider seconds as part of the process.”