Second charge mortgages 'down in January'

Date:Friday 27th March 2009
Author: Max Freedman

Second charge mortgage lending was down in January of this year compared with the same period in 2008, new figures indicate.

Such loans are traditionally used for building home extensions or for debt consolidation.

According to the Finance and Leasing Association (FLA), its members wrote £53 million of new secured loan business in January 2009, which is 84 per cent down on the same period last year.

Commenting on the statistics, head of consumer finance at the FLA Fiona Hoyle said: "Second mortgage new business fell significantly in 2008 as a result of the difficulties facing companies trying to secure funding in the commercial markets."

Figures released earlier this month by the Council of Mortgage Lenders suggested that mortgage lending fell to an eight-year low in the UK during February.

Director-general at the council Michael Coogan claimed that contradictory government policies have exacerbated problems in the mortgage market during the credit crunch.