Brightstar Financial argues more intermediaries should reconsider secured loans as a viable capital raising vehicle.
Latest figures from the Finance & Leasing Association (FLA) show that May saw a rise of 17% in secured loan lending over May 2011, with completed mortgages over £300 million for the first time since November 2010. This comes on the back of strong growth of 14% by value and 4% by volume in the first quarter of 2012.
Bradley Moore, director at Brightstar Financial, believes the effect of so many mortgage customers being ‘trapped’ with their current lenders by the withdrawal of interest only and tougher criteria impositions with other lenders, has opened up a new avenue for advisers to recommend secured loans.
He said: “The evidence is clear. The new figures underline the proof that secured loans with their transparent structure, historically low cost, improved lending criteria and no upfront charges can provide a welcome avenue for brokers looking to raise capital for clients in the face of the restrictions in the mainstream mortgage market.
“Secured loans provide an alternative way for clients to release equity from their home whilst leaving their current mortgage in place and Shawbrook has certainly experienced a higher demand as both brokers and clients realise their importance as a viable alternative to remortgaging,” added Maeve Ward, head of sales, secured lending at Shawbrook Bank.