Second charge lending down 6% in January

New figures released today by the Finance & Leasing Association (FLA) show growth of 10% in consumer finance new business in January, compared with the same month in 2016.

Credit card and personal loan new business together grew by 11% compared with January 2016, while retail store and online credit new business increased by 1%. Second charge mortgage new business fell 6% by value and 11% by volume over the same period.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:

“There was new business growth across most of the main consumer finance products in January, suggesting that consumer confidence remained relatively robust at the start of 2017.

“The latest research from Oxford Economics on behalf of the FLA shows that total new consumer credit in the UK is expected to grow by 1.4% in 2017 as a whole, a more modest rate than in recent years.”

Harry Landy, Sales Director at Enterprise Finance, said:

“Article 50, European Presidential contests, and Trump’s unpredictable White House policies are all set to make 2017 another year of uncertainty. Today’s figures show January was a quiet month for the second charge mortgage market, but it’s important to note that year-on-year growth remains.


“The specialist lending sector as a whole is growing, and we are seeing an increasing number of investors exploring the flexibility specialist financing can offer. FCA regulation and the introduction of the MCD have positively influenced the market, improving choice and quality for consumers. Intermediaries are also becoming more aware of the benefits of second charge mortgages and specialist lending, advising their clients on the speed and flexibility these can offer. As such, we are confident that the market will continue to grow even further in the months ahead.”


Table 1: New consumer credit lending

Jan 2017 % change on prev. year 3 months to Jan 2017 % change on prev. year 12 months to Jan 2017 % change on prev. year
Total FLA consumer finance (£m)2 7,096 +10 21,964 +7 88,713 +9
Data extracts:
Retail store and online credit (£m) 451 +1 1,902 0 6,569 +3
Credit cards & personal loans (£m) 3,925 +11 12,158 +8 45,199 +8
Second charge mortgages (£m) 69 -6 218 -4 869 +1
Car finance (£m) 2,347 +12 6,821 +9 31,902 +11
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