If summer is the season of home improvements, then 2025 is shaping up to be a bumper year. But in today’s mortgage market, more people are opting to improve, not move and second charge loans are playing a big part in that.
We’re seeing a steady shift in borrower behaviour. With fixed-rate mortgages locked in at lower levels, and the cost of moving higher than ever, many homeowners are choosing to stay put and reinvest in their current property.
THE COST OF MOVING HAS NEVER BEEN HIGHER
Between stamp duty, estate agent fees, and legal costs, moving home is an expensive business.
In April, research from Barclays stated that the cost of moving house has jumped by 45% in the past five years. Taxes, fees and surveys cost the average homebuyer in the past year £13,530, according to Barclays, up from £9,337 before the pandemic.
The current interest rate climate and the fact that borrowers may be tied into long fixed-rate deals, it’s easy to see why remortgaging to raise funds is a non-starter for many. Early repayment charges alone can be enough to put someone off.
That’s before you even get into the limited housing stock and increasing house prices. For some, finding the right property simply isn’t possible right now.
So, people are choosing to work with what they’ve got: adding space, updating kitchens and bathrooms, or finally getting round to that loft conversion.
SECOND CHARGES FILL A FUNDING GAP
When clients ask how to raise money without touching their main mortgage, second charges are often an option. They let borrowers keep their current rate and product, while giving them the freedom to access additional funds for improvements.
We’re seeing strong demand this summer for second charges used to fund everything from kitchen extensions to full refurbishments. They’re especially helpful for larger works, where personal loans or credit cards wouldn’t cover the cost or would prove far more expensive in the long run.
Second charge lenders have also stepped up on speed and flexibility. In the right circumstances, a second charge loan can be completed far quicker than a full remortgage, especially if it’s being handled by a packager that knows the market well.
SUITABILITY STILL MATTERS
That said, second charges won’t be right for everyone. As with any regulated advice, it’s about suitability. At Norton Broker Services, we assess each case on its merits including considering income, equity, existing credit commitments, and future plans. We’ll also review credit history and affordability to make sure a second charge is appropriate.
However, there’s still work to be done in terms of broker education. Some advisers may not realise just how useful second charges can be, especially for clients who are otherwise mortgage prisoners, or facing stiff penalties to switch. But with the right support, brokers can offer their clients more than a binary choice between remortgaging or doing nothing.
MAKE THE MOST OF SUMMER DEMAND
We often think of January as the time for new plans, but for home improvements, summer is peak season. With better weather and longer days, clients are more inclined to take on building work or home upgrades.
For brokers, this is an ideal time to have conversations about second charge options. It’s also an opportunity to stand out by offering clients a solution that meets their needs now, rather than forcing them to wait until their fixed term ends.
Homeowners aren’t standing still. They’re adapting. And second charge loans are giving them the tools to do just that.
