Stable pricing and strong lender appetite make secured lending an increasingly reliable tool for brokers helping clients avoid a costly remortgage
With affordability pressures keeping millions of homeowners locked into existing mortgage deals, the second charge market is quietly becoming one of the more reliable tools in a broker's armoury.
According to Peter Williams (pictured top), chief executive of Propp, the market has entered a period of measured confidence, and one defined less by dramatic shifts than by steady opportunity.
"The second charge market has remained stable over the last quarter, with very little movement in pricing or lender criteria," Williams told Mortgage Introducer. "Lending appetite remains strong, giving brokers confidence that there are still plenty of options available for clients."
That stability sits against a backdrop of meaningful growth. Second charge mortgage new business volumes rose 22% in Q1 compared with the same period the previous year, reaching 11,489 agreements, while the value of new business climbed 33% to £625 million, according to data from the Finance & Leasing Association (FLA).
Why are borrowers turning to second charge loans?
The answer, Williams argues, lies largely in the arithmetic of remortgaging. Many borrowers who secured fixed-rate deals at historically low rates face a stark choice. Disturb an arrangement that is still working in their favour or find another way to access capital.
"Many borrowers are locked into historically low mortgage rates and simply can't justify, or don't qualify for, a full remortgage at today's rates," he said. "As a result, brokers are increasingly turning to second charge lending as a way of helping clients raise additional capital without sacrificing the benefits of their existing mortgage."
Changing behaviour in the housing market is reinforcing that trend. Higher stamp duty costs and the mounting expense of moving have made staying put an increasingly rational decision for many homeowners, and a second charge loan offers a practical route to funding the improvements that make that choice sustainable.
"We're also seeing changing borrower behaviour," Williams said. "Higher stamp duty costs and the expense of moving mean more homeowners are choosing to stay put and invest in their current property instead, driving demand for secured loans to fund home improvements. Alongside this, we're continuing to see clients using second charge loans to meet tax liabilities and consolidate debt, as household finances remain under pressure."
Those use cases reflect broader market dynamics. The FLA has noted that demand is expected to remain resilient over the coming months as households seek flexible funding for home improvements, loan consolidation, and other major expenses.
Brokers working in the specialist lending space will recognise the pattern. Second charge lending has long served clients who fall outside the criteria for a straightforward remortgage, but the current rate environment has significantly widened that pool.
What does a streamlined process mean for brokers?
Beyond the demand story, Williams points to improvements in how lenders are actually processing applications, a development with direct implications for broker efficiency.
"One of the most positive developments has been the continued improvement in lender processes," he said. "More providers are adopting fully digital application journeys, including e-signatures and reduced documentation, helping to speed up applications and improve the overall customer experience."
That shift matters in a market where speed can be the deciding factor for a client under financial pressure. For brokers navigating the second charge mortgage market on behalf of clients with time-sensitive needs, a faster, more streamlined process reduces friction at a critical point in the advice journey.
A reliable market for the months ahead
Looking forward, Williams does not anticipate major disruption to either pricing or criteria. Lenders, he suggests, are more likely to direct their energy towards technology and operational improvements than towards any significant recalibration of their appetite.
For brokers, that represents a degree of predictability that is genuinely useful when managing a client pipeline, particularly at a time when many households are still navigating the financial strain of higher living costs and elevated borrowing rates.
The conditions that have driven second charge growth throughout 2025 and into 2026 show little sign of easing.
Mortgage prisoners, debt consolidators, and homeowners funding major improvements all remain active in the market, and Williams expects that to continue. As he put it: "As long as affordability remains a challenge for many homeowners, second charge lending will continue to play an important role in helping clients access capital without disrupting their existing mortgage arrangements."
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