Secured Loan Index: Second Charge lending see’s increase in higher LTV product take up

10 February 2021

January Summary - We can exclusively reveal that Second Charge lending totalled £60.8 million in January 2021, compared to the £104 million lent in January 2020. It's fair to say that is about the only comparison that can be drawn, as January 2020 saw the country buoyant after a favourable Brexit deal had been signed, hot on the heels of a record breaking General Election victory, whereas January 2021 was Lockdown V3 and schools closed across the country.

Despite the dip in lending month on money we have seen an increase in loans written above 85% LTV from 5.63% in December to 9.48% this past month. As featured in the October edition of the Secured Loan Index there are a range of Second Charge products available above 90% LTV where most first charge lenders have heavily restricted lending.

The reintroduction of Equfinance's 'Plus Range' of Second Charges in January would have contributed to this increase, a product that offers loans up to 95% LTV for borrowers with a good credit profile.Second Charge lenders have continued to enhance criteria and lending options throughout January, with probably the biggest change coming from Oplo, who have increased their maximum loan to £100,000 and dropped their headline rate to 5%.

We are delighted to welcome Together Money as a contributor to the Secured Loan Index.

Together Money made several enhancements to their Second Charge range and as part of a program of continued improvements, LTV has been increased to 70% for loans up to £250,000 whilst also reducing the minimum loan size they will accept to £30,000.

Together Money, Shawbrook Bank and Oplo have all announced an increase in the use of Hometrack Desktop Valuations; Together will now accept an AVM for loans up to £250,000 and Oplo to £100,000, whilst Shawbrook have increased the range of properties where a Hometrack can replace a physical valuation by increasing the maximum property value to £2 million in London & South East.

Finally Evolution Money announced the launch of a second charge product for borrowers who have been severely financially impacted by lockdown for loans up to £50,000.