The Intermediary – December 2025 - Flipbook - Page 54
S E C O N D C H A RG E
Opinion
Growth, competition
and elevated
expectations
T
here has never been
a beer time to be
a second charge
customer, or as a
broker, to have the
option in your portfolio.
Momentum built in the laer part
of 2024 has translated into clear
growth this year. Rising demand from
consumers and intense competition
among lenders have driven increased
capacity and a shi in expectations
around service and innovation.
In the year to October 2025, the
market rose by nearly 25% on the
previous 12 months. Cost-of-living
pressures and an appetite for home
improvement have encouraged
borrowers to look at reducing
borrowing costs, with a second charge
oen being the most efficient option.
For many, the proposition has been
straightforward: access additional
cash and replace expensive unsecured
credit without disturbing a first
charge mortgage or incurring early
redemption charges.
As a result, broker awareness
and confidence in second charge
mortgages has continued to grow,
supported by beer education, more
streamlined processes and wider
product availability. What may once
have been a niche alternative has
stepped into the mainstream, and the
market will comfortably exceed £2bn
of new lending this year.
Borrowers have benefied as new
lenders increased competition.
Interest rates have fallen by around
2% since summer 2024; product
features have become more flexible,
more tailored and more imaginative;
criteria adjustments have expanded
availability; and completion times
have tumbled.
While these developments are
positive for customers, strong
52
The Intermediary | December 2025
pricing must still be backed by
robust underwriting, high-quality
operations, good technology,
effective fraud systems and
dependable funding.
This leads to perhaps the most
crucial insight of 2025: service is no
longer a differentiator, it is a baseline.
Brokers rightly expect fast
packaging responses, accurate
credit assessments, consistent
communication and dependable
completion timelines as standard
practice. These are no longer added
extras, they are expected.
When lenders deliver these
outcomes, they are simply perceived
as doing the job properly. Conversely,
when service falters – whether
through delayed processes, unclear
communication or missed service
level agreements (SLAs) – the impact
is immediate and significant.
With more lenders crowding into
the space and more customer choice
than ever, the consequences of geing
it wrong are amplified, not only in lost
volumes but in lost trust.
For Interbridge Mortgages, 2025
has reflected many of these wider
trends. Having surpassed £500m in
lending in just 18 months, our growth
underscores both the strength of
demand within the second charge
sector and the appetite among brokers
for lenders that focus relentlessly on
simplicity and service excellence.
Despite the growth, some things
never change. I have been active in
the second charge market for decades,
and the core customer demographic
has always been consistent. We
lend primarily to professional, dual
income, owner-occupied households
with above average salaries and access
to a wide range of credit facilities.
Our customers oen have expensive
unsecured debts, and we are typically
JONNY JONES
is CEO at Interbridge Mortgages
able to reduce their monthly outgoings
by about £400. That cashflow
improvement can be transformative
to a family, meaning they no longer
feel anxious when an unexpected bill
arrives, or can enjoy a family holiday.
That’s why second charge is such a
valuable product for brokers when
customers are feeling the pinch.
Looking to 2026
First, we expect to see new lenders
entering the sector, aracted by
its growth potential. Increased
choice is healthy, provided entrants
are commied to sustainable
pricing models, have a long-term
commitment to the market, and invest
in service infrastructure.
Second, technology-led innovation
will accelerate. Automation, artificial
intelligence (AI) assisted processes and
greater broker integration will drive
further efficiency, reducing friction
while enhancing risk oversight.
The winners will be those that
deploy tech not simply to move faster,
but to communicate beer, assess
more accurately and deliver certainty.
2026 is likely to build on the themes
of this year: rising demand, tighter
competition and further service
improvements. ‘Good’ service will be
assumed, and only those lenders that
consistently deliver will maintain
broker loyalty and sustainable growth.
2025 has shown the sector at its
best – ambitious, competitive and
customer-focused. The challenge
next year will be to deliver further
improvements in both product and
service quality, and good outcomes for
brokers and their customers. ●
