Secured lending in the UK has risen sharply in the first quarter of 2025, with new research from specialist lender Pepper Money revealing a significant uptick in both awareness and adoption of second charge loans.
More than half (51%) of UK adults now recognise secured lending as a viable route to raise capital — up from just one-third of homeowners with a mortgage a year ago.
The figure rises to 54% among homeowners, who may be increasingly reluctant to refinance in a high interest rate environment that could disrupt favourable terms on their existing mortgages. Pepper Money attributes the shift in part to economic pressures, including persistent inflation and rising living costs, which are prompting a broader reassessment of borrowing options.
Analysis of official figures from the Finance & Leasing Association (FLA) shows the total value of secured loans reached £470 million in the first quarter of 2025, representing a 41% increase over two years. The volume of secured loans rose to 9,406 in the same period — a 26% rise from 7,446 in Q1 2023. At the current pace, the number of borrowers turning to secured loans is expected to exceed 42,000 by the end of the year.
Between 2020 and 2024, homeowners accessed £6.5 billion in property wealth via secured loans, an increase of 27% compared to the previous five-year period. During the same time frame, the market grew by nearly a third — faster than any other segment of the mortgage industry.
Ryan McGrath, director of second charge mortgages at Pepper Money, said the rapid growth in activity reflects both increased consumer awareness and the shifting economic backdrop. “The secured lending market continues to gather momentum, with more than half of homeowners now aware of this previously little-known product,” he said.
“This increased understanding, coupled with economic pressures, has been reflected in the amount of secured lending that is taking place, reaching £470 million in the first quarter of the year, which puts the market well on its way to reach £1.7 billion by the end of 2025, with Pepper Money’s 2024 lending volume standing at over £500 million.”
McGrath added: “More consumers are recognising the opportunity that secured loans can provide. Unlike personal loans or credit cards, these loans allow individuals to unlock the value in their property, offering larger loan amounts, longer repayment terms, and typically lower interest rates — as well as enabling them to borrow without impacting the rate on their primary mortgage, which isn’t possible with a remortgage.
“While not right for every homeowner, for the right person a secured loan can provide a sensible way to make home improvements, settle personal tax bills, pay off school fees, or consolidate debts.”
