Business volumes across the consumer finance sector increased by 3% in February compared to 2024, the latest data from the Finance & Leasing Association (FLA) has shown.
Through the opening two months of 2025, the FLA’s figures revealed that new consumer finance business was 2% up on the same period in 2024.
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.
In the February data, the credit card and personal loans sectors together reported new business 2% higher than in the same month in 2024, while the retail store and online credit sector reported a fall in new business of 2% over the same period.
The value of new business totalled £8.7bn in February, with the credit card and personal loans sectors £4.7bn and car finance (£2.9bn) comprising the bulk of new business.
Director of research and chief economist at the FLA, Geraldine Kilkelly, said: “Consumer finance new business provided by FLA members continued to grow at a modest rate in February supported by strong performances in the new car finance and second charge mortgage markets.
“The US administration’s tariff hikes have weakened an already soft economic outlook. Uncertainty about jobs and higher inflation in the coming months are likely to weigh further on consumer confidence and spending. Our latest research suggests that total UK new consumer credit by value will grow by 6% in 2025, with the credit card finance market increasing by 5%.”
In the second charge mortgage market, new business totalled £156m in February, a figure up 20% on the same month last year.
The FLA’s director of consumer and mortgage finance and inclusion, Fiona Hoyle, added: “The second charge mortgage market reported further growth in February but at a slower pace than in recent months.
“The distribution of new business by purpose of loan in February 2025 showed that the proportion of new agreements which were for the consolidation of existing loans at 58.1%; for home improvements and the consolidation of existing loans at 22.9%; and for home improvements only at 11.1%.
“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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