Brexit has forced people to turn to second charge mortgages as the UK continues to face economic uncertainty, it has been claimed.
Specialist packager Thistle Finance said it saw a 12 per cent year-on-year increase in second charge mortgage activity in the fourth quarter of 2018.
Thistle noted around 25 per cent of the total loans arranged were partly or fully used to help people cover their self-assessment tax bills, payable before the January 31 2019 deadline.
Mark Dyason, managing director of Thistle Finance, said: "It's common knowledge that the seconds market is thriving and the fact that people don't want to jeopardise extremely low mortgage rates is certainly a key driver in this.
"What stood out in the fourth quarter, however, is how a far larger number of people than usual were using second charges to pay off their tax bills.
"You can only speculate as to why, but it could be that a protracted period of high inflation has had an impact or Brexit uncertainty has reduced income or work flow."
Figures released by the Finance and Leasing Association last month revealed the second charge market grew in December 2018 for the sixth month in a row.
According to the FLA, new agreements increased by 13 per cent to 1,792 (£80m) compared to 1,584 in December 2017. The number of new agreements for 2018 stood at 23,529, up 7 per cent from 2017, with a value of just over £1bn.
The association said it expects the market to see further single-digit new business growth in 2019.
Nicholas Morrey, mortgage technical manager at John Charcol, said: "Brexit has certainly caused uncertainly. As a result, fewer people are moving property and instead are looking to do home improvements.
"However, some may be reluctant to get funding from their original mortgage lender so instead are looking to second charge loans, explaining the possible increase in this sector."