New business in the consumer finance space increased by 7% in October compared to the same month last year, figures from the Finance & Leasing Association (FLA) have indicated.

The FLA’s latest data shows that in the 10 months to October 2022, new business has been 17% 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.

According to the latest figures, the credit card and personal loan sectors together reported new business up by 4% in October compared with the same month in 2021, while the retail store and online credit sector reported new business growth of 13% over the same period.

Director of research and chief economist at the FLA, Geraldine Kilkelly, commented: “In October, the consumer finance market represented by FLA members reported single-digit new business growth for only the third time so far this year. Performances across sectors varied but most finance products reported growth in the value of new business compared with the same month a year earlier.

“In 2022 as a whole, we expect consumer finance new business provided by FLA members to reach £119bn, 17% higher than in 2021 which largely reflects the recovery following the pandemic. The value of outstanding consumer finance contracts at the end of October was 1% higher than pre-pandemic.

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

The FLA’s figures for the second charge mortgage market showed that the value of new business reached £143m in October, a 31% increase on the same month in 2021.

Commenting on these figures, director of consumer and mortgage finance and Inclusion at the FLA, Fiona Hoyle, added: “The second charge mortgage market continued to report strong growth in October, with new business volumes in excess of 3,000 agreements for a fourth consecutive month.

“The distribution by purpose of loan in October showed 57% of new agreements were for the consolidation of existing loans, 15% for home improvements, and a further 22% for both loan consolidation and home improvements.

“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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