Second charge lending down 12% in February

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business fell 3% in February, compared with the same month in 2016.

Credit card and personal loan new business together fell by 4% compared with February 2016, while retail store and online credit new business was down by 5%. Second charge mortgage new business fell 6% by value and 12% by volume over the same period.

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

“The fall in new business in February was the first monthly contraction since January 2015. The latest research by Oxford Economics, on behalf of the FLA, suggests that total UK new consumer credit is expected to grow at a more modest rate in 2017 as a whole than in recent years.”

Harry Landy, Sales Director at Enterprise Finance, comments:

“The second charge market had a slow start to the year, as today’s figures attest. However, we are expecting to see confidence building and growth returning in the coming months. The industry needs to work together to raise awareness of the benefits second charge mortgages can offer. This is particularly important when we engage with intermediaries so they are equipped to best advise their clients.”

Table 1: New consumer credit lending

Feb 2017 % change on prev. year 3 months to Feb 2017 % change on prev. year 12 months to Feb 2017 % change on prev. year
Total FLA consumer finance (£m) 6,292 -3 20,600 +3 88,531 +7
Data extracts:
Retail store and online credit (£m) 452 -5 1,618 -3 6,545 +2
Credit cards & personal loans (£m) 3,489 -4 11,539 +3 45,046 +6
Second charge mortgages (£m) 76 -6 217 -6 864 -2
Car finance (£m) 2,004 +2 6,401 +6 31,939 +10
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