The amount of second charge lending contracted by 45.2 per cent in February to £95.3m and is the first time lending has fallen beneath £100m since August 2021.

According to the Loans Warehouse Secured Loans Index, the amount of second charge lending has decreased by around 8.79 per cent compared to January this year.

The report noted that there was a dip in higher loan to value (LTV) lending compared to January, with a decrease of 3.59 per cent in loan above 85 per cent LTV.

The proportion of loans above 85 per cent LTV was 11.3 per cent and below 85 per cent LTV loans was 88.7 per cent.

It continued that service had continued to improve with average completion time coming to 14.19 days, which is 0.23 days faster than January.

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March lending increase predicted

The report added that the fall in volume was being addressed by lenders making rate reductions in the last month and the predictions for March point to a “significant increase in lending as funding becomes more secure”.

Completions in February come to 2,374, which is 11 per cent down on the prior month.

The most popular type of loan was consolidation at around 49.9 per cent, followed by consolidation and home improvements at 31.9 per cent and home improvements at 11.8 per cent.

The average term is around 16.3 years.