SPECIALIST lending markets experienced strong growth in May, helped by low interest rates and a strong labour market, figures show.
Three of the four specialist lending markets covered by the Finance & Leasing Association (FLA) saw double-digit growth, including consumer finance new business, which rose 11 per cent year-on-year to £9.1bn.
Credit card and personal loan new business together grew by 11 per cent, while retail store and online credit new business increased by eight per cent.
Geraldine Kilkelly, head of research and chief economist at the FLA, said this growth was in line with wider trends in the economy.
“Retail sales were boosted by events such as the Royal Wedding and hot weather, while the continued strength of the labour market and low interest rate environment meant consumer confidence remained relatively stable in the first half of 2018,” she said.
The point of sale consumer car finance market, meanwhile, grew 15 per cent by value and 10 per cent by volume in May, continuing its recovery from April and in line with demand for new car purchases.
The used car finance market also reported new business growth of 12 per cent by value and nine per cent by volume.
Asset finance new business, which primarily includes leasing and hire purchase, increased by 10 per cent year-on-year to £2.9bn.
The industry provided support to the construction, manufacturing and agricultural sectors, with new finance for equipment in these sectors up by six per cent, 11 per cent and 22 per cent respectively.
Second charge mortgage lending, however, showed sluggish growth in May, with volumes rising by two per cent and the value of new business contracting by one per cent to £88m.