There have been two sets of data which have been released by the FLA. One, the fall in second charge repossessions as evidenced by the latest information from the FLA, is cause for quiet celebration. The second, the increase in new business in the sector is also great news but needs to be put into greater perspective.
It is not just the flashy headlines about increases in new business that act as a positive barometer for a sector like second charge.
For me, the 50% decrease in repossessions over the same period last year is demonstration of just how well the second charge lending community have taken on the requirements of the regulator. Much is made of treating customers fairly and we tend to talk about it as a process that takes place at the beginning of the journey, when clients are looking for the right deal. Much more rarely do we think about the fact that the whole ethos of treating customers fairly should still be the guiding principle until redemption.
So, it is very heartening to see that second charge lenders (along with the rest of the sector) have quietly but diligently worked with the change of regulator to the FCA and integrated the changes, already required of the first charge market. With very little fuss, after the MCD came into force, the industry has adapted well and I think the regulator has very little to be concerned with at this point just over 15 months after MCD as far as the second charge sector is concerned.
As far as the jump in new second charge business is concerned, I had been among the first to say that many commentators were too quick to write off second charge business after the seeming lack of new business progress for secured loans in the wake of MCD, particularly at the one year anniversary. However, it is also premature to assume that after one very positive set of figures, the second charge industry is all set for plain sailing.
Persuading the intermediary community to look at and work with a second charge proposition is an ongoing role which we at Fluent for Advisers take very seriously.
The second charge sector is showing the world that it has worked hard to be taken seriously and every adviser should be looking to see how far secured loans have come.
Jeff Davidson is head of intermediaries at Fluent for Advisers