New business volumes in the second charge mortgage market rose by 19% in January 2026, according to the latest figures from the Finance & Leasing Association (FLA).
A total of 3,456 new agreements were completed during the month, while the value of new business reached £183m, representing a 26% increase on the same period a year earlier.
Over the three months to January, new business volumes climbed by 26% to 10,769 agreements, with lending value up 31% to £568m. On a rolling 12-month basis, the market recorded 42,309 agreements, a 17% increase year-on-year, with total lending reaching £2.179 billion, up 24%.
Fiona Hoyle, director of consumer and mortgage finance and inclusion at the Finance & Leasing Association, said: “The second charge mortgage market made a positive start to 2026 although the pace of growth slowed slightly compared with recent months.
“Following the FCA’s recent report on second charge mortgages, the FLA will be working closely with the regulator to understand their findings as we continue to support customers who want to consolidate higher-interest rate loans into more affordable borrowing.”
The figures suggest the sector continues to benefit from demand for debt consolidation, particularly as borrowers seek alternatives to higher-cost unsecured credit.
STRONG MOMENTUM
James Gillam, managing director at Pure Panel Management, said: “At Pure Panel Management, we continue to see strong momentum in second charge surveying activity and Q1 2026 is looking like being a record quarter for second charge valuation instructions, reflecting the wider growth in lending volumes across the market.
“This time of year especially places greater emphasis on the valuation process and speed of funding as a whole, as many loans at this time of year are needed for debt consolidation and so lenders and brokers need partners who can respond quickly while maintaining the coverage and consistency required to keep cases progressing.”
SPECIALIST LENDING
The data also highlights the continued role of specialist lending in supporting borrowers navigating higher interest rate environments, with second charge mortgages offering a route to restructure existing debt without disturbing primary mortgage arrangements.
While growth remains robust on an annual basis, the FLA noted that the pace has moderated compared with recent months, pointing to a more measured trajectory for the market as 2026 progresses.
FLA members provided £163 billion of new finance to UK businesses and households in 2025, of which £122 billion was consumer credit, accounting for almost a third of total new consumer credit written during the year.
