The second charge mortgage market must keep pushing the education message if it wants to grow, according to Alistair Ewing of The Lending Channel, speaking at the Financial Services Expo (FSE) Glasgow.

“Seconds are a mile away from there they need to be,” said Ewing. “It’s a niche market of course, but it needs to be a bigger niche market. The influx of business we might have expected post-MCD has not happened and we need to do a better job in terms of educating the consumer. For some it’s still seen as a loan of ‘last resort’ and that’s not the case.”

He added: “The market’s not gone far enough yet. We have loads of brokers on our panel who still won’t consider seconds, despite our efforts to educate them. It needs to grow.”

Robert Sinclair, chief executive of AMI, agreed that seconds could fill a vital function: “I see a second charge mortgage as a good way to do debt consolidation; taking the second over a shorter term, and that’s likely to keep the regulator happy as well.”

John Coffield of Paradigm Mortgage Services said that the sector probably needed time to find its feet in the new environment. “I still think there is a hangover with seconds in that they are viewed as expensive products, which I don’t believe they are,” he said. “It does take a while for these things to bed in; just because the regulator says it should look a certain way, doesn’t mean it won’t take time.”

When asked about the FCA’s mortgage market competition study, Coffield said that there were competition issues that could be addressed. “I think there are competition issues surrounding new lenders coming to market and the challenges they face,” he said. “I think there are issues in the directly authorised (DA) market who can’t compete with the larger networks, because of the restrictions placed on new lenders.”