Table of Contents
Executive Summary
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- The market
- 24% growth in 2015
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- Figure 1: Forecast of secured loans market by gross advances 2011-20
- Existing mortgage providers are first port of call for borrowers
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- Figure 2: Sources of information used/likely to be used to find information on secured loans, October 2015
- Key players
- Number of lenders has grown over recent years
- MCD drives product innovation
- The consumer
- 3% of people have a secured loan
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- Figure 3: Loan and credit product ownership, October 2015
- Nearly two thirds of homeowners would not consider a secured loan
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- Figure 4: Secured loan usage and consideration, October 2015
- Consumers most likely to consider a loan for home improvements
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- Figure 5: Factors influencing choice of secured loan provider
- Three quarters do not want to put their home at risk
- Consumers struggle to find relevance in secured loans
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- Figure 6: Attitudes towards secured loans, October 2015
- What we think
Issues and Insights
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- Moving beyond a product of last resort
- The facts
- The implications
- Consumer education is key to growth
- The facts
- The implications
- Broker proactivity will unlock potential borrowers
- The facts
- The implications
The Market – What You Need to Know
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- Strong market growth forecast
- Consumers would go to their mortgage provider
- Tightened credit conditions lead people to alternative forms of credit
- Market success relies on broker acceptance
Market Size and Forecast
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- 24% growth expected in 2015
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- Figure 7: Value of secured loans, by gross advances, 2011-15
- Significant growth expected over the next few years
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- Figure 8: Forecast of secured loans market, gross advances, 2010-20
- Figure 9: Value of secured loans forecast, 2010-20
- Forecast methodology
Channels to Market
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- Distribution structure has evolved
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- Figure 10: Possible channels to purchase for secured loans
- Consumers would go to their mortgage provider
- Over half would use online sources
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- Figure 11: Sources of information used/likely to be used to find information on secured loans, October 2015
- Market success relies on broker acceptance
Market Drivers
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- Secured lending faces regulatory overhaul
- Tightened credit conditions lead people to alternative forms of credit
- Secured loan rates reach record lows
- Market confidence has driven an increase in funding
- Rising property prices make it appealing to take out a secured loan
- Consumer confidence is increasing
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- Figure 12: Financial confidence, January 2009-October 2015
Key Players – What You Need to Know
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- Changing landscape for secured lending
- Less than half of lenders offer direct purchases
- The rise of prime borrowing
- Buy-to-let secured loans
- Lending into retirement
Key Players
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- Changing landscape for secured lending
- Evolution Money
- Overview
- Secured loan product range
- Distribution channels
- Recent activity
- Masthaven Secured Loans
- Overview
- Secured loan product range
- Distribution channels
- Recent activity
- Precise Mortgages
- Overview
- Secured loan product range
- Distribution channels
- Recent activity
- Prestige Finance
- Overview
- Secured loan product range
- Distribution channels
- Recent activity
- Shawbrook Bank
- Overview
- Secured loan product range
- Distribution channels
- Recent activity
Competitive Strategies
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- Heightened period of innovation
- The rise of prime borrowing
- Buy-to-let secured loans
- Less than half of lenders offer direct purchases
- Growing number of fixed rate products
- Lending into retirement
- Lenders reduce fees
- Technology is key to good service
The Consumer – What You Need to Know
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- Ownership increases among those with multiple products
- Two thirds would not consider a secured loan
- Secured loans used for investment purchases
- Interest rates and flexibility are a priority
- Secured loans seen as a last resort
Loan and Credit Product Ownership
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- Only 3% owe money on a secured loan
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- Figure 13: Loan and credit product ownership, October 2015
- Ownership increases among those with multiple products
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- Figure 14: Loan and credit product ownership, by repertoire of loan and credit products ownership, October 2015
- Secured loans outside the scope of borrowing needs
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- Figure 15: Amount owed on credit products (excluding main mortgage), by credit products owned, October 2015
Secured Loan Consideration
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- Two thirds would not consider a secured loan
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- Figure 16: Secured loan usage and consideration, October 2015
- Mortgage holders more likely to consider a secured loan
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- Figure 17: Secured loan usage and consideration, by housing situation, October 2015
- Lenders need to do more to attract prime customers
Reasons for Secured Loan Ownership
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- Home improvements drive borrowing
- Other considerations split across key milestone purchases
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- Figure 18: Reasons for taking out a secured loan, October 2015
Factors Influencing Choice of Provider
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- Interest rates are a priority
- Flexibility gives consumers an element of control
- Borrowing from a reputable brand is less important
- Online purchase is not a priority
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- Figure 19: Factors influencing choice of secured loan provider, October 2015
Attitudes towards Secured Loans
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- Three quarters do not want to put their home at risk
- Women less likely to put their home at risk
- Secured loans seen as a last resort
- Secured lending seen as an option for borrowing larger amounts
- A third don’t fully understand how secured loans work
- Confusion over the cost of borrowing
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- Figure 20: Attitudes towards secured loans, October 2015
Attitudes towards Borrowing
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- General dislike of being in debt
- Credit check concerns
- Combining credit could make it easier to manage
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- Figure 21: Attitudes towards borrowing, October 2015
- High consideration among those looking to take out a loan
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- Figure 22: Secured loan usage and consideration, by agreement with the statement ‘I am considering taking out a loan within the next 12 months’, October 2015
Appendix – Data Sources, Abbreviations and Supporting Information
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- Products covered in this report
- Data sources
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 23: Best- and worst-case scenario forecast – Value of secured loans, by gross advances, 2015-20
- Forecast methodology
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