Second Charge Watch: broaden the offer


Since April 2020, and from such a low point for many sectors in the early stages of Covid-19, the recovery has been more than a small stop-start.

Uncertainties surround our industry and many others.

In the market in general, there is still some ambiguity about lending attitudes. We can see that time off and payment time off is always onerous for some of the lenders, and this has additional repercussions for some clients – some related to employment status, others related to the industry in which they work.

Self-employed people still don’t find it particularly easy, and so do those looking to borrow for buy-to-let purposes. Add to this the continued nervousness surrounding sectors that have been hit hard by the pandemic, such as travel and retail.

Technology has been an integral part of the evolution of the lender mix over the past 18 months

For people working in these industries, some lenders haven’t fully recalibrated yet and this can be a real challenge. People whose livelihoods depend on these sectors are still not able to borrow as they once could.

Towards growth

The secured loan market is rebounding, however – rates are low and flexibility is enormous, so there is a real opportunity for growth.

However, more awareness is needed across the market to take advantage of these opportunities.

When it comes to the second largest expense market, the two major areas of borrowing continued to be around home renovations and debt consolidation. At the very least, the past 18 months have given some time for reflection to address these areas.

Investing in home improvements to add value to existing assets is always seen as a cost effective way to move up the property ladder when the time is right.

Those who focus more on FinTech have been the ones who traded in these uncertain times

And with many people looking at their finances, whether it’s to tighten their belts or take advantage of a quieter time to consider all of their financial options, debt consolidation has also been a big reason for lending.

There is certainly an opinion that a number of people have had to dig deep and live on reduced income – some for over a year – and this has prompted them to take a closer look at their finances and take action. positive to resolve them.

Find a match

In our opinion, the volumes behind second load borrowing requests have not changed significantly from those we saw before the pandemic. The main difference, however, has been to match the demand to the lenders.

Over the past 18 months, we have seen some lenders exit the market temporarily or permanently; some new ones have gained ground as well as market share, and some have modified their lending policies to adapt to the changes we are seeing.

A number of people had to live on a reduced income

Matching applicants – some often with unique requirements that are a product of their employment situation or the industry in which they operate – with a lender capable of delivering a product tailored to those individual needs has been the real challenge.

As 2022 approaches, there is a huge opportunity for lenders to expand their offerings, especially by making more use of technology.

We know that technology has been an integral part of the shift in lender allocation over the past 18 months. Those with more fintech focus have been the ones who negotiated during these uncertain times, while providing service that more closely matches how we see customers and introducers expecting business to be done. .

Those who can fuse the best people with the best technology will gain the most traction.

Suzanne Aspden is Group Marketing Director at Fluent Money

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