New business conducted in the consumer finance sector saw a rise of 33% in November 2021 compared with the same month in 2020, new figures published by the Finance & Leasing Association (FLA) have shown.
The figure means that in the 11 months last year to the end of November, new business was 14% higher than in the same period in 2020.
FLA members in the consumer finance sector consist of 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 loan sectors together reported new business up by 34% in November compared with the same month in 2020, as well as 15% growth in the 11 months to November 2021.
Elsewhere, the retail store and online credit sector reported a 2% rise in new business during November compared with the same month in 2020, as well as a 7% increase in the first 11 months of 2021.
“In the run up to Christmas the consumer finance market reported growth across the board, in part reflecting low new business levels a year earlier as the UK entered another lockdown to deal with rising Covid-19 cases,” said FLA director of research and chief economist, Geraldine Kilkelly. “Consumer demand also remained robust with the retail store and online credit sector reporting its strongest November on record.
“Consumer finance new business provided by FLA members in 2021 as a whole is likely to be around 7% lower than its pre-pandemic peak and the rate of recovery is expected to slow in the near term as household disposable incomes are squeezed by higher inflation, taxes and interest rates.”
In the second charge mortgage sector, the FLA also revealed that November saw £114m worth of new business conducted in the month, reflecting a 48% increase on the same month in 2020.
Commenting on these figures, FLA director of consumer and mortgage finance and inclusion, Fiona Hoyle, added: “The second charge mortgage market reported its eighth consecutive month of new business volumes growth in November as the market continued its recover from the impacts of the pandemic. New business volumes in 2021 as a whole are expected to be 16% below the pre-pandemic peak.”
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