The latest Enterprise Finance Secured Loan Index has shown that secured lending has grown by 13.7 per cent in March.

The figures mean that £75.5 million of second charge mortgages were taken out by homeowners in the third month of 2015 which is a five-year high for the sector.

Director of Enterprise Finance, Harry Landy, says that March’s secured lending activity represents the market shifting up a gear and shows demand for consumer credit remains high.

“Annual lending of £799 million represents a significant increase from the £672 million seen in the twelve months to March 2014 and if the secured loan market continues to grow at this rate, then this time next year we won’t be far off talking about a billion-pound industry,” said Harry.

“How smoothly the secured loan sector reacts to being regulated in the same manner as mainstream mortgages when the switch occurs next March will obviously be a determining factor in when that particular landmark is reached, but it shouldn’t represent a significant challenge to further growth.”

According to the survey the average secured loan size was £61,347 and home improvements remain the most common reason for individuals using secured loans with debt consolidation the second most popular use.

“Average loan sizes hovered around the £50,000 mark throughout 2014, but the increase beyond £60,000 in March sees typical transactions return to the sort of level we experienced last spring,” added Harry.

“Given that home improvements continue to be the most popular reason for taking out a secured loan, it could well be that individuals are accessing larger tranches of secured finance to pay for work to their houses as the weather warms up.

“With cost of living concerns more muted than they have been previously, we are likely to see a continued trend of individuals using secured loans to finance larger projects and purchases rather than to finance more everyday expenses.”

Harry now believes that the usual feel-good factor after the General Election will mean that consumer confidence in secured loans will continue to rise.

“With wages finally on the rise after a long period of stagnation, many people will feel better off than they have in some time, but for those seeking an extra cash injection, secured loans may represent a suitable solution.”