Equifinance report changing customer profile as CCJs soar

16 February 2017

Equifinance, the specialist second charge mortgage lender, says the profile for customers taking out a second charge mortgage has changed significantly against the backdrop of CCJs in 2016 being at record levels.

The Registry Trust reports there were 912,389 county court judgments (CCJs) against consumers in England and Wales during 2016 - more than any year on record. Despite the average value of a consumer CCJ, falling to £1,711, the volume of CCJs has shaped Equifinance’s customer profile.

Looking back at the profile of customers from 2013 it was extremely rare to get a professional applicant taking a second charge for debt consolidation, however, they are now seeing a wider spread of the geodemographic profile to include more aspirational professionals in good employment. They’re also taking out larger loans, with the average Equifinance loan also increasing over the last year.

The other growing sector on the book, is those customers who have had good jobs but were unfortunately made redundant and went self-employed for a few years. Many of these are now back in full time employment and looking to re-establish their credit profile. As they have maintained mortgage payments and have moved back into full time employment, they are good customers with the ability to pay for their loans in the long term.

Historical credit issues may have arisen due to divorce, a failed business venture and redundancy, but this doesn’t make them bad customers for the future. Indeed many have quite a few years highly relevant experience and the qualifications in their industry to secure solid employment.

Tony Marshall, Managing Director of Equifinance commented: “Although the number of CCJs registered against consumers in the second half of 2016 rose by nearly 20 percent, we haven’t seen a discernible Brexit effect. As second charges have been presented as a real option with significant benefits for many customers, we are seeing this reflected in a changing customer profile.

“And it’s not just MCD and continued debt recovery customers that has brought this on. Factors including our increasing distribution model and product innovation have also helped to promote our products. Homeowners have also seen the equity in their property increase in recent years and it’s certainly attracting a new profile of client who can use the loans to better managing debt.”