The PRA changes are part of a broader expansion of second charge loans being used beyond residential property loans. As regulation changes market structures and opportunities, we are seeing second charge mortgages being used for buy-to-let and commercial cases too rather than constantly re-mortgaging.
We see rates below 4% encouraging brokers and clients to use second charge mortgages without disturbing the first charge. It is not just rates driving business. Regulation has helped to remove any stigma of the sector and it is no longer viewed as ‘sub-prime’
There has been huge growth in residential second charge mortgages and those benefits are transferring to commercial and investment loans too.