New business volumes in the second charge mortgage market fell by 1% in May, although lending remained well ahead of last year’s levels overall.
Figures from the Finance & Leasing Association (FLA) show lenders completed 3,245 new second charge mortgage agreements in May 2026, down 1% compared with the same month a year earlier. It was the first annual decline in new business volumes since April 2025.
Despite the monthly fall, the value of new business continued to increase. Lending totalled £175 million in May, up 9% year-on-year.
Over the three months to May, lenders completed 10,878 new agreements, a rise of 13% on the same period last year, with lending by value increasing 25% to £594 million.
On a rolling 12-month basis, the market recorded 44,402 new agreements, up 19% year-on-year, while lending by value rose 28% to £2.355 billion.
Across the first five months of 2026, new business volumes increased by 17% compared with the same period in 2025.
Fiona Hoyle, director of consumer finance & mortgages and inclusion at the Finance & Leasing Association, said: “May saw the second charge mortgage market report its first contraction in new business volumes since April 2025. Despite this, new business volumes grew by 17% in the first five months of 2026.
“Demand is expected to remain resilient over the coming months as households seek flexible funding for home improvements, loan consolidation and other major expenses. Second charge mortgages continue to provide a valuable option for consumers looking to manage their finances effectively.”
