New business across the consumer finance space increased by 21% in April 2022 compared to the same month last year, new figures published by the Finance & Leasing Association (FLA) have indicated.

In the first four months of the year, new business has been 30% higher than in the same period in 2021.

FLA members in 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 loan sectors together reported that new business was up by 30% in April compared with the same month last year, while the retail store and online credit sector reported new business growth of 12% over the same period.

Commenting on the latest figures, director of research and chief economist at the FLA, Geraldine Kilkelly, said: “The consumer finance market continued its recovery in April following the pandemic, with the value of new business growing across each of the main finance products. The value of outstanding contracts at the end of April remained 2% lower than in February 2020.

“Our latest research suggests that new business growth in the consumer finance market will slow as the pressure on household incomes from higher inflation, interest rates, and taxes weighs on consumer spending.  UK new consumer credit is expected to grow by 29% in the first half of 2022 and by 12% in the second half of the year.

“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”

In the second charge mortgage market, the FLA reported £127m worth of new business was carried out during April, a figure up by 54% on the same month last year.

Commenting on the this figure, FLA director of consumer and mortgage finance and inclusion, Fiona Hoyle, added: “The second charge mortgage market reported another strong performance in April, with annual new business volumes only 4% below the pre-pandemic peak.

“Of the total new agreements written in April, 53% were for the consolidation of existing loans, 16% for home improvements, and a further 25% were for both loan consolidation and home improvement.

“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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