The total value of new business agreed in the consumer credit sector grew by 6% in 2025 to £122.5bn, new figures released by the Finance & Leasing Association (FLA) have shown.

December’s total of £10.4bn in new business rounded off the year, which was a 10% jump on the same month in 2024.

The figures were contributed by members of the FLA from across the consumer finance sector, which 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 cards and personal loans sector contributed the most in new business with £64.1bn agreed, a 5% jump on 2024, while motor finance contributed £41.1bn which was up year-on-year by 6%.

Retail store and online credit totalled £9.1bn in 2025, although this was a 4% drop on 2024.

Director of research and chief economist at the FLA, Geraldine Kilkelly, said: “The consumer finance market reported a strong end to 2025 with growth across most of the main finance products in December. For FLA members, new lending of over £122bn was a record year.

“With inflation and interest rates on a downward path this should support further growth in 2026 as FLA members continue to support households make essential purchases.”

In the second charge mortgage market, December’s new business volumes totalled £182m, representing a 42% increase on the same month in 2024.

Across 2025, the FLA’s figures showed that £2.1bn worth of second charge mortgage lending was agreed, a total up by 24% on 2024 levels and the largest annual figure in this market for 17 years.

Director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, commented: “The second charge mortgage market ended 2025 on a strong note with new business volumes up 35% in December compared with the same month in 2024. In 2025 as a whole, new business by both value and volume reached its highest level since 2008.

“The analysis of loan purpose suggests a stable picture with the proportion of new business volumes which were solely for the consolidation of existing loans last year at 58.3%. A further 23.0% were for home improvements and loan consolidation, and 12.0% solely for home improvements.”

---