Loans Warehouse’s latest secured loans index indicates there was a month-on-month fall in August lending figures of 13.65% which is just short of £7,800,000.
The firm reported exactly the same percentage growth from August last year as it saw last month, which it argues would suggest a seasonal adjustment.
Despite this, the number of lending products and lenders is at a post credit crunch high; there are now an 220 secured loan products available from 17 different lenders.
August lending figures continue the recent trend of consistent monthly year on year growth, now standing at an 33rd consecutive month.
Sam Busfield, co-founder and director of Loans Warehouse, said: “Welcome to a slightly delayed edition of the Secured Loan Index, mainly due to the recently announced consultation paper from the FCA ‘Implementation of the Mortgage Credit Directive and the new regime for second charge mortgages’. It’s a very interesting read and any responses need to be with them by 29th December 2014. They will start full regulation of second charge mortgages on 21st March 2016.
“Secured loans are going to now be classed as ‘regulated mortgage contracts’ and therefore be in the same category as first charge mortgages. The FCA are proposing to apply most elements of current first charge regulation to secured loans.
“There is no doubt that there are going to be additional restrictions in place, the most obvious of which is surrounding affordability. There will be much greater emphasis placed on income and expenditure and “stress testing” both the secured loan and first mortgage payments.
“Will that lead to some applications that would have been written today not being written in the future? Undoubtedly.
However, it is by no means all doom and gloom. This is a genuine opportunity for our industry to seize. Being regulated on a par with first charge mortgages also means being considered.
“When a consumer is looking to raise additional funds they must be made aware of other possible options; re-mortgage, further advance, secured loan. This can be done as part of an initial disclosure rather than as part of the sales process but it means that we are now going to be in the consciousness of a whole new audience and that is a major opportunity for us all.
“We are expecting to see many changes to lenders’ criteria in October. As mentioned first in last months Secured Loan Index, Shawbrook Bank are expected to make the biggest changes to their lending range, whilst Blemain has started the month with the launch of a new fixed rate range of second charges, and we’re still waiting to see other lenders reactions to Norton Home Loans market leading new near prime rates.”
