The value of new remortgage business has increased by 35 per cent over the past year, the latest statistics from the Finance & Leasing Association (FLA) have revealed.
£31 million of second mortgages were lent by FLA lender members in October 2012, representing an increase in value of over a third and a 20 per cent rise in volume compared with the same month last year.
Funds provided by FLA members accounted for 29.8 per cent of the UK consumer credit market, maintaining a steady share in the total market seen for the past few months.
7 per cent more credit was made available compared with October 2011, with FLA members lending out £4.6 billion.
The general health of the market means that the past year has been a lucrative one for FLA members, with 5 per cent more being lent out than compared with the 12 months ago.
Store cards saw a drop in activity, however, reducing by 15 per cent in October 2012 to account for £121 million of lending.
Credit cards and personal loans also saw a downturn, with the £2.562 billion lent marking a 5 per cent lull compared with October 2011, rounding off a year which fell 1 per cent short of the total lent last year.
In the past 12 months, the secured market has swollen to account for £320 million of lending, maintaining an incremental trend of yearly totals since second charge lending hit £300 million in April 2011-2012.
The recent strong performance of secured credit follows an impressive period of growth, evident since the FLA announced that £24 million of second mortgages were leant out in February 2012, a 26 per cent rise since the same month the previous year.
Speaking about October’s statistics, the FLA’s Head of Consumer Finance, Fiona Hoyle, said: “October saw the strongest growth in second charge mortgages so far in 2012. New business grew 35 per cent by value (to £31 million) and 20 per cent by volume (1,113).
“Continuing growth in the intermediated credit markets – both high street and motor credit - again demonstrates the importance of responsibly-provided retail credit for consumers and the wider economy.”
Fiona urged for caution when considering impending regulatory changes within the industry, however.
She said: “With the regulation of second charge mortgages due to transfer to the Financial Conduct Authority in 2014, firms must be given enough time to train staff and make systems changes. Rushing the new system will risk undermining growth in this sector.”