Volumes of business carried out in the consumer finance sector for the 10 months of 2023 to the end of October were 3% down compared to last year, new figures from the Finance & Leasing Association (FLA) have indicated.
This comes as October’s new business volumes were at a similar level when compared to the same month in 2022, totalling £9.6bn for the month.
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 credit card and personal loans sectors together reported new business up by 2% compared with the same month last year, while the retail store and online credit sector reported a fall in new business of 4% over the same period.
Director of research and chief economist at the FLA, Geraldine Kilkelly, said: “October saw the consumer finance market represented by FLA members hold steady, with a continuation of trends in the individual sectors seen in much of 2023 so far.
“FLA’s latest research suggests that the value of new consumer credit in the UK is expected to grow by 2.3% in 2024, with the credit card market forecast to grow by 2.0% over that period.
The FLA also revealed that in the second charge mortgage space, business volumes totalled £122m in October, a fall of 15% on the same month last year.
Director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, said that recent trends in the second charge mortgage market reflect a strong performance last year that “has not been sustained during 2023”, as well as the subdued economic outlook.
“The distribution by purpose of loan in October showed that 61% of new agreements were for the consolidation of existing loans, 12% for home improvements, and a further 23% for both loan consolidation and home improvements,” Hoyle commented.
“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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