The Intermediary –- May 2026 - Flipbook - Page 60
S E C O N D C H A RG E
Opinion
What’s driving
he second charge
market reached
£2.14bn in 2025, its
highest level since
2008. That volume
doesn’t come from
nowhere. It reflects what’s happening
in the first charge market and in the
wider economy, and some of it is
very specific to the current lending
environment. Here are the trends
we’re seeing.
T
High value loans
We’re seeing a shi in the profile of
cases coming through. Higher value
secured loans are becoming more
common, with our highest recent
completion at £425,000 and solutions
available up to £500,000. These are
oen clients with significant property
equity and complex financial lives,
individuals for whom a secured loan is
a considered financial planning tool,
not a fallback. That shi maers for
how advisers think about when and
why to refer.
Debt-to-income ratios
Some mainstream first charge
lenders apply strict debt-to-income
thresholds. Where a client’s total debt
commitments exceed that threshold,
they may decline regardless of how
much equity the client has, or how
clean their payment record is. It’s a
criteria decision, not a credit decision,
and we’re seeing it regularly.
We’re seeing clients with strong
equity positions and otherwise solid
cases hiing a wall simply because
of how their existing commitments
stack up on paper.
In these scenarios, a secured loan
siing behind the first charge is
PAUL MCGERRIGAN
is CEO at Loan.co.uk
frequently the right answer.
The existing rate stays untouched,
the early repayment charge (ERC)
position isn’t disturbed, and the
capital gets raised without the
first charge lender needing to be
involved at all.
Growing businesses
A successful sole trader or portfolio
landlord with a large January tax
bill didn’t arrive there by accident. A
significant HMRC payment typically
reflects a good year. The challenge is
that seling a large tax liability from
