866-997-4948(US-Canada Toll Free)

Secured Loans - UK - February 2016

Published By :

Mintel

Published Date : Feb 2016

Category :

Banking

No. of Pages : N/A

Secured loans are experiencing a revival, following a dramatic decline in sales a few years ago due to the impact of the financial crisis. The market faces regulatory overhaul in 2016, which will bring greater attention to secured loans and change the way these products are viewed by both brokers and consumers. It may finally be time for the market to move away from being seen as a last resort lending product.

Table of Content

Overview

What you need to know

Executive Summary

The market
24% growth in 2015
Figure 1: Forecast of secured loans market by gross advances 2011-20
Existing mortgage providers are first port of call for borrowers
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
Figure 3: Loan and credit product ownership, October 2015
Nearly two thirds of homeowners would not consider a secured loan
Figure 4: Secured loan usage and consideration, October 2015
Consumers most likely to consider a loan for home improvements
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
Figure 6: Attitudes towards secured loans, October 2015
What we think

Issues and Insights

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

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

24% growth expected in 2015
Figure 7: Value of secured loans, by gross advances, 2011-15
Significant growth expected over the next few years
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

Distribution structure has evolved
Figure 10: Possible channels to purchase for secured loans
Consumers would go to their mortgage provider
Over half would use online sources
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

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
Figure 12: Financial confidence, January 2009-October 2015

Key Players – What You Need to Know

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

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

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

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

Only 3% owe money on a secured loan
Figure 13: Loan and credit product ownership, October 2015
Ownership increases among those with multiple products
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
Figure 15: Amount owed on credit products (excluding main mortgage), by credit products owned, October 2015

Secured Loan Consideration

Two thirds would not consider a secured loan
Figure 16: Secured loan usage and consideration, October 2015
Mortgage holders more likely to consider a secured loan
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

Home improvements drive borrowing
Other considerations split across key milestone purchases
Figure 18: Reasons for taking out a secured loan, October 2015

Factors Influencing Choice of Provider

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
Figure 19: Factors influencing choice of secured loan provider, October 2015

Attitudes towards Secured Loans

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
Figure 20: Attitudes towards secured loans, October 2015

Attitudes towards Borrowing

General dislike of being in debt
Credit check concerns
Combining credit could make it easier to manage
Figure 21: Attitudes towards borrowing, October 2015
High consideration among those looking to take out a loan
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

Products covered in this report
Data sources
Abbreviations
Consumer research methodology

Appendix – Market Size and Forecast

Figure 23: Best- and worst-case scenario forecast – Value of secured loans, by gross advances, 2015-20
Forecast methodology

List of Table

NA

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company *
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *

Upcoming Reports

  • Sugar and Gum Confectionery - UK - January 2015

    Rising dental health concerns can create an opportunity for chewing gum brands. Currently much of the marketing for sugar-free gums centres around fresh breath, however, the dental health benefits, particularly for children, could warrant more focus. Though explored internationally, tooth-friendly gums tailored for children remain rare in the UK market....