Business volumes in the consumer finance space registered a 3% fall in the first six months of 2023 compared to last year.
According to new figures published by the Finance & Leasing Association (FLA), consumer finance new business climbed by just 1% in June compared to the same month last year.
Members of the FLA from 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 retail store and online credit sector reported that new business was up in June by 3% compared with the same month in 2022, while the credit card and personal loan sectors together reported a fall in new business of 1% over the same period.
A total of £10bn worth of business was conducted in the consumer finance space in June.
“In June, FLA consumer finance providers reported the first monthly increase in total new business since January of this year,” commented director of research and chief economist at the FLA, Geraldine Kilkelly. “The overall performance was boosted by a return to growth in the consumer new car finance and second charge mortgage markets, and further growth in the retail store and online credit sector.
“FLA consumer finance markets have proved resilient despite tougher economic conditions with new business down only 3% in the first half of 2023.”
In the second charge mortgage space, the FLA’s figures indicated that £136m worth of new business was agreed in June, made of 2,928 new agreements, which was a 4% increase on the same month last year.
Commenting on these figures, the FLA’s director of consumer and mortgage finance and inclusion, , Fiona Hoyle, added: “June saw a return to growth in the second charge mortgage market as new business increased by value and volume for the first time since January this year.
“The distribution by purpose of loan in June showed 58% of new agreements were for the consolidation of existing loans, 13% for home improvements, and a further 23% for both loan consolidation and home improvements.
“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”
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