The latest figures from the Finance & Leasing Association show that new second charge mortgage agreements reached 3,828 in June, a 9% increase compared with the same month last year. That follows a 1% year-on-year fall in May, suggesting a renewed appetite among homeowners for borrowing secured against their property, behind an existing first mortgage.
A second charge allows a homeowner to raise funds without disturbing their main home loan, often used for debt consolidation, home improvements, or large purchases. The June uptick may reflect households turning to this route as other forms of credit remain expensive. While the numbers are still modest compared with the pre-pandemic era, the direction of travel points to a market that is regaining momentum after a subdued spring.
Where property values shape the second charge picture
One factor that influences second charge lending is the equity a homeowner holds. In postcode districts where average prices are lower, the amount of usable equity can be thinner, potentially limiting how much can be borrowed. Our own analysis of Land Registry data picks out SR1, the city-centre postcode in Sunderland, as the cheapest district in this dataset.
| District | Post town | Region | Average price |
|---|---|---|---|
| SR1 | Sunderland | North East | £69,939 |
| DL4 | Shildon | North East | £79,214 |
| TS1 | Middlesbrough | North East | £80,533 |
| TS3 | Middlesbrough | North East | £82,642 |
| DN31 | Grimsby | Yorkshire and The Humber | £82,845 |
| HU2 | Hull | Yorkshire and The Humber | £86,318 |
| SR8 | Peterlee | North East | £89,506 |
| CF43 | Ferndale | Wales | £90,459 |
| BD1 | Bradford | Yorkshire and The Humber | £93,903 |
| DL17 | Ferryhill | North East | £98,478 |
At an average of £69,939, a property in SR1 sits well below the national average. For a homeowner there, the equity available for a second charge might be modest, but even a smaller loan can make a difference. The 9% national rise in second charge agreements might look different on the ground in areas like this, where low purchase prices mean smaller mortgages and, for some, less headroom to borrow further. Yet it also means that for those with little unsecured borrowing capacity, a second charge could still be an accessible option if they have built up some equity over time.
The data behind this
The second charge mortgage figures are sourced from the Finance & Leasing Association. Average property prices for SR1 come from HM Land Registry sold price data. Wider demographic context that helps us understand the postcode district is drawn from the ONS census and the Postcodes UK database.
In response to reporting by Mortgage Solutions. Analysis and figures by Postcodes UK.