New business volumes in the consumer finance industry grew to £9.7bn in January, a 3% jump compared to the same month last year, new figures released by the Finance & Leasing Association (FLA) have shown.
In the 12-month period to the end of January, consumer finance business agreed by FLA members was up by 6% compared to the corresponding period last year.
Members of the FLA from across the consumer finance sector include banks, credit card providers, store card providers, second charge mortgage lenders, personal loan and instalment credit providers, as well as motor finance providers.
The credit card and personal loans sectors (£5.1bn) together reported new business 1% higher in January compared with the same month in 2025, while the retail store and online credit sector (£634m) reported a fall in new business of 5% over the same period.
Director of research and chief economist at the FLA, Geraldine Kilkelly, commented: “The consumer finance market made an encouraging start to 2026, but the outlook has become more challenging.
“Rising tensions in the Middle East are pushing up global energy costs, and inflation is now expected to increase rather than ease, delaying any move towards lower interest rates and placing renewed pressure on household budgets.
“If these cost pressures persist, consumers are likely to become more cautious, leading to softer demand and greater sensitivity to affordability. As conditions tighten, FLA members will continue to support households navigate a more difficult economic environment through the provision of responsibly provided finance.”
In the second charge mortgage market, January saw £183m worth of new business agreed, a 26% increase on the same month last year.
Director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, added: “The second charge mortgage market made a positive start to 2026 although the pace of growth slowed slightly compared with recent months.
“Following the FCA’s recent report on second charge mortgages, the FLA will be working closely with the regulator to understand their findings as we continue to support customers who want to consolidate higher-interest rate loans into more affordable borrowing.”
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