Business volumes in the second charge mortgage market grew by 16% in August compared to the same month last year, new figures published by the Finance & Leasing Association (FLA) have revealed.
A total 3,149 new agreements were made in August, while the value of this new business reached £152m.
Members of the FLA from across the consumer finance sector include second charge mortgage lenders as well as banks, credit card providers, store card providers, personal loan and instalment credit providers, and motor finance providers.
The FLA’s director of consumer and mortgage finance and inclusion, Fiona Hoyle, said that second charge mortgage lenders had now reported the eighth consecutive month of new business growth by both value and volume in August, following a subdued performance during 2023.
“In the eight months to August 2024, new business volumes were 14% higher than in the same period in 2023,” Hoyle added.
“The distribution of new business by purpose of loan in August showed that the proportion of new agreements which were for the consolidation of existing loans was 59.4%; for home improvements and the consolidation of existing loans was 21.4%; and for home improvements only was 13.5%.”
For the entire consumer finance sector, the FLA revealed that new business volumes had fallen by 1% in August compared with the same month in 2023.
The credit card and personal loans sectors together reported new business 1% lower in August that in the same month in 2023, while the retail store and online credit sector reported a fall in new business of 6% over the same period.
FLA director of research and chief economist, Geraldine Kilkelly, added: “The consumer finance market was subdued in August and the recent recovery in consumer confidence appears to have stalled amid concerns over what the Budget at the end of October will bring.
“The FLA’s Q3 2024 Industry Outlook Survey suggested that the majority of consumer finance respondents (71%) expected some increase in new business over the next 12 months, although this was lower than in the Q2 2024 Survey.
“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”
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