New business carried out in the consumer finance space jumped by 19% in March compared to the same month last year, figures published by the Finance & Leasing Association (FLA) have revealed.

The FLA’s latest figures have confirmed that new consumer finance business for the first quarter of 2022 was 34% higher than in the same quarter last year.

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 climbed by 33% in March compared with the same month in 2021, totalling £5bn worth of business. The retail store and online credit sector also reported new business growth of 8% over the same period, to total £773m for the month.

FLA director of research and chief economist, Geraldine Kilkelly, commented: “FLA consumer finance providers reported further double-digit growth in March to reach a record level of monthly new business of more than £11bn.

“This strong performance continued to reflect pent-up demand, the distorting effects from the closure of shops and showrooms during the third UK lockdown last year, and the widespread inflationary pressures that have built up post-pandemic and following the invasion of Ukraine.

“The UK economic outlook has weakened significantly because of the squeeze on household incomes and business profit margins from higher inflation. The consumer finance market is likely to see growth moderate as the year progress, with single-digit new business growth in 2022 as a whole.

“As always, any customer worried about meeting payments should speak to their lender as soon as possible to find a solution.”

In the second charge mortgage sector, £139m worth of new business was carried out in March – an increase of 53% on the same month in 2021.

Director of consumer and mortgage finance and inclusion, Fiona Hoyle, added: “New business volumes in the second charge mortgage market in March reached their highest level since September 2008. The market helps consumers in a variety of ways, including funding home improvements and by better management of their finances through loan consolidation.

“As always, any customer worried about meeting payments should speak to their lender as soon as possible to find a solution.”

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