by Mark Johnston
More Secured Lenders Enter the Market.
The secured loan market is growing and lenders are now seeing opportunities in this largely underserved marketplace.
It seems then that currently the secured lending market is seeing an increase in the number of lenders.
Figures released by the Finance and Leasing Association (FLA) showed a small increase in secured lending in January 2013, of 1 per cent compared with the same month the previous year.
The second charge mortgage market has reported its strongest performance since October 2012. It also reported that new second charge mortgage business grew in January this year by 30 per cent in value and 14 per cent in volume.
Prestige Finance, the intermediary focused second charge lender, has launched a new range of products specifically targeting self employed borrowers with rates from 6,75 per cent on loan to values of 75 per cent.
Dave Pinnington, managing director of VLoans, a secured loan broker firm, said “it is fantastic to see a lender of Prestige’s calibre expand their range of products to cater for the prime sector of the market”.
Simon Stern, director at Prestige Finance, also commented that “we are coming back in to the market at a time when the demand for secured loans is increasing”.
1st stop options has announced it is to reduce its rates across their £4,000 plus range of products and they are also extending their maximum loans to £12,500.
In addition to this they have also decided to increase their maximum loan to values (LTV) on £7,500 plus loans to 90 per cent.
Simon Hayton, director of operations at 1st stop’s brokerage arm, stated “the new products fit nicely for those customers with historic credit issues that have got themselves back on track in the last 12 months but still find it difficult to obtain credit from the high street”.
Research has shown that many home owners are hindered by a lack of loan to value (LTV) lending options.
Shawbrook bank has introduced a market leading 95 per cent loan to value (LTV) secured loan product. This lenders loan sizes range from £300 to £25,000 and this will enable more people who are currently unable to release equity from their property to take advantage.
This has meant that the Shawbrook bank has therefore become the first lender to reintroduce a 95 per cent loan to value (LTV) product to the second charge mortgage market.
Maeve Ward, head of sales at Shwabrook bank, said “we are very proud of the impact we made in the secured lending market last year and we are therefore delighted to introduce a new product which the sector was crying out for”.
Many industry experts now believe that these innovations may encourage other lenders within this market to lower their rates and also increase loan to value (LTV) levels.
This in turn should then prompt an increase in market activity as borrowers take full advantage of a stronger and even more competitive market.
In conclusion, the simple fact is that secured loan products and their criteria offers more opportunities for borrowing than the first charge market currently does.
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