United Trust Bank comments on increase in Second Charge new lending and record low repossession figures from the FLA

Latest figures from the Finance and Leasing Association (FLA) show that repossessions in the second charge market have fallen to a record low of 0.06% of average outstanding arrangements in 2017 compared to 0.34% in 2009.

Buster Tolfree, Commercial Director – Mortgages, United Trust Bank comments.

“The entire first and second charge mortgage market has come a long way since 2004, especially in terms of best advice, underwriting principles and the post-Mortgage Market Review approach to affordability. M-Day, the MMR, the Mortgage Credit Directive and a host of other regulatory steps have helped to create a more stable environment.

“The majority of lenders are now mainly banks with other mortgage offerings alongside second charges. They accordingly have extensive underwriting and term affordability assessments and it is encouraging to see this effort translate to good market growth, positive customer outcomes and a record low of repossessions.

“The Council of Mortgage Lenders / UK Finance figures from August 2017 reported that the rate of repossessions for first charges was stable at 0.02%, so it is fantastic to see second charge rates continue to show a steady reduction and at 0.06% are now almost at parity.”