David Beard

Second charge lenders still have a good appetite, explains David Beard, the founder of Lending Expert, one of the UK’s leading price comparison websites.

Beard explains that whilst the UK is in its third lockdown, the housing market remains open and property valuations can still take place, allowing applications to be processed and deals to be completed across second charge loans, mortgages, bridging loans and more.

 

David Beard, founder of Lending Expert, explained:

“While business levels were quite significantly effected during the first national lockdown in March 2020, it’s now “business as usual” during this third lockdown for the secured loans industry.” 

“January 2021 is showing that many second charge lenders still have a good appetite to lend and borrowing rates and products have mostly remained unchanged. The key differences to note are during this third national lockdown is that the housing market has remained open and lenders are able to instruct surveyors for home valuations which is critical to successfully carry out secured lending and mortgage applications.”

“This time round there is no restriction on physical valuations and for over a decade the industry has offered a huge range of products available using Hometrack or similar desktop valuation models.”

 

david beard lending expert
David Beard believes that second charge lending will thrive, despite the third lockdown

 

Stamp duty deadline also likely to play a role

With the upcoming stamp duty deadline of 31st March 2021, this will certainly play a role in boosting mortgage applications and deals in Q1. With those properties under £500,000 in the UK incurring zero stamp duty, there is certainly an incentive for first-time buyers, homeowners and developers to make an application or complete on a purchase, giving them a saving of £15,000.

With the deadline around 8 weeks away, this will certainly be a busy time for borrowers, brokers and lenders and this will continue to drive the second charge and general mortgage market, certainly in Q1.

What remains after in Q2 is yet to be determined and it could result in a major house pricing crash or a surge in house prices too.

 

About second charges

Second charge loans are used by developers and homeowners as a way to raise additional funds on an existing mortgage. The amount you can borrow is a little less than your first mortgage and it is known as a second charge because it is the second priority after your first mortgage has been paid. For developers, second charges are used to pay off existing debts, renovations, building work or finance a new property. For homeowners, second mortgages are often used to raise funds for debt consolidation, school fees, weddings and more. There is always a risk of repossession if you cannot repay your loan on time, or you may have to give up equity in your first original property to the outstanding lender.