Secured future is bright but let’s not get carried away

Tim Wheeldon is joint managing director of Fluent Money


There has been a great deal of optimism within the secured loan industry over the past few months and it isn’t hard to see why.


It really does seem like the industry is finally starting to get some well-deserved recognition as a viable alternative to remortgaging.


The Finance & Leasing Association recently reported that the secured loan market has witnessed a strong increase during the first six months of the year, with lending figures reaching an impressive £150m; a 12% increase on the same period last year.


Things are definitely looking positive. However, as an industry we cannot be said to be home and dry as a lot of hard work remains to be done.


The industry will not continue to grow simply as a result of external factors, namely tightening remortgaging criteria.


Whilst the secured loan market has no doubt benefitted from a number of other trends, such as record low rates and an increase in high quality, profitable lending, there are key changes yet to be made in order for it to live up to its full potential.


The industry itself has got to move and expand: if not it will stagnate and become irrelevant.  


One of the crucial longstanding issues within the industry at the moment is a lack of lenders; there is still only a handful.


We need a significant increase in both the number of lenders and the diversity of their product offerings if there is to be a possibility of the industry growing to the point where it can be considered as mainstream.


The future is certainly looking bright for secured loans but we don’t need sunglasses just yet.