Consumer finance new business jumps 147% from last April

New business conducted across consumer finance jumped by 147% in April compared with the same month last year, according to new figures published by the Finance & Leasing Association (FLA).

In the first four months of 2021, new business was 1% higher than in the same period in 2020.

The FLA’s figures showed that retail store and online credit sector reported new business climbing 31% in April compared with same month in 2020, and growth of 8% in the first four months of 2021.

The credit card and personal loan sectors together reported new business up by 61% in April compared with the same month in 2020, but a fall of 12% in the first four months of 2021.

FLA director of research and chief economist, Geraldine Kilkelly, commented: “The strong pick-up in consumer finance new business was expected with the further easing of lockdown restrictions in April and given the adverse impact of the first lockdown on new business levels during the second quarter of last year.

“The latest figures show that the recovery in April was broad-based, with new business provided through personal loans and credit cards growing, year-on-year, for the first time since the pandemic began.

“Pent-up demand and an improvement in consumer confidence are expected to contribute to a strong recovery during the second half of 2021, with our latest research suggesting that consumer finance new business will grow by 14% in 2021 as a whole, and by a further 16% in 2022.”

FLA members in the consumer finance sector include banks, credit card providers, store card providers, motor finance providers, personal loan and instalment credit providers, as well as second charge mortgage lenders.

The FLA data for the second charge mortgage market showed there was £81m worth of new business in April, which represented an increase of 154% on April 2020.

Commenting on the figures for the second charge mortgage market, FLA director of consumer and mortgage finance and inclusion, Fiona Hoyle, added: “The second charge mortgage market returned to growth in April in line with expectations given the adverse impact of the first lockdown on new business levels in the second quarter of 2020.

“The market is expected to record a strong recovery in new business levels during the second half of 2021.” 

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