Secured market tops £250m in 2014

The market also recorded its second best month of lending since October 2009 with a total of £51,072,181 lent to borrowers during the month.

Matt Tristram, co-founder and director of Loans Warehouse and Clearly Loans, said: “There has been a clear focus on one section of the secured loan market.

“With several prime lenders gearing up for launch in the coming months, the focus in the last few weeks has been firmly on near prime products with lenders like Blemain, Step One, Central Trust and Masthaven having all made funding announcements, all trying to increase their market share by making significant changes to their lending criteria.

“To give you an idea of the level of adverse accepted on a typical near prime secured loan plan, lenders will allow a default or CCJ in the last 24 months or a mortgage arrear in the last 12 months.

“Missed payments on unsecured credit tend to be dismissed as long as the item hasn't been more than 2 months in arrears in the last 12 months.

“Finally Step One. Their headline rate remains the same at 8.9% but they have reduced rates on the majority of LTV bandings, reduced their lending fee to now start at £495 and expanded the availability of their 95% LTV product for both employed and self employed applicants.”

Tristram also pointed to a number of changes to buy-to-let product ranges as a positive for the industry.

He said: “There have also been some changes to the secured loans offered by several lenders against BTL properties. Whilst I believe no lender has really grabbed this market by the horns yet, the rates are coming down and loans sizes increasing.

“At the start of last month, Masthaven took over from Shawbrook with the industry's headline rate of 9.45% for a secured loan on a BTL.

“Blemain have now slightly undercut that rate with the introduction of a 9.4% rate on their Prime Single Buy to Let plans.

“In the last few days Central Trust entered the BTL market with the launch of a new range of unregulated secured loans on BTL properties which start at 9.99% on loans from £3000 to £70,000 up to 75% LTV in England, Wales & Scotland.

“With the Bank of England announcing plans to require lenders to check mortgage applications can cope with a greater interest rate rise, and limiting higher LTI mortgages to 15% of completed business, it will be interesting to see how the market and lenders with an appetite to lend react in the coming months. Secured lenders have historically looked to capitalise on gaps in the first mortgage market so this could be another opportunity to get creative."