Members of the Finance & Leasing Association (FLA) across the asset finance, consumer finance and motor finance markets provided £76.3bn of new business in the first half of 2023, new figures from the association have revealed.

The sum represents a 1% rise compared to the same period in 2022.

Of the total, £57.3bn has been provided to households, including £20.4bn for new and used car purchases, while £31.5bn was provided by non-bank lenders. The figures also showed that £19.0bn was provided to businesses for investment in machinery, equipment, and vehicles, including £12.5bn to SMEs.

Members of the FLA from 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.

“FLA markets have proved resilient in the first half of 2023 despite tough economic conditions,” said director general at the FLA, Stephen Haddrill.

“It is especially good news that asset finance provided to businesses increased by 18% in June compared with the previous year and 15% in Q2 2023 compared to Q2 2022. This means that in June alone over £500m more lending was provided by FLA members for business investment. This shows the underlying resilience of businesses and the strength of the asset finance market.”

However, despite the rise in the total value of lending over H1, the FLA’s latest figures indicated that consumer finance new business fell in July, by 2% compared with the same month last year. In the seven months to July, new business has remained 3% lower than in the same period in 2022.

Within this, the retail store and online credit sector reported a fall in new business in July of 3% compared with the same month in 2022, while the credit card and personal loan sectors together reported a decrease in new business of 1% over the same period.

Director of research and chief economist at the FLA, Geraldine Kilkelly, said: “FLA consumer finance providers reported a modest fall in new business in July reflecting more cautious consumer sentiment given the higher interest rate environment.

“FLA’s latest research suggests that the value of new consumer credit in the UK in 2023 is likely to be 6.7% higher than in 2022, with the credit card market expected to grow by 9.1% over that period.”

The association also reported new figures for the second charge mortgage market, which showed that £126m worth of new business was conducted in July – a figure down by 14% compared to the same month last year.

Commenting on these figures, director of consumer and mortgage finance and inclusion at the FLA, Fiona Hoyle, added: “The second charge mortgage market reported new business 14% lower by both value and volume in July, reflecting more cautious consumer sentiment given the current economic environment. The average advance in July was £46,759, a similar level to the same month in 2022.

“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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