New business volumes within both the second charge mortgage market and consumer car finance markets both dropped in February, figures from the Finance & Leasing Association (FLA) have shown.
In February, there were 1,609 new second charge mortgage agreements worth £67m, representing falls of 34 and 37 per cent respectively from the same month in 2020.
“The UK lockdown restrictions over the winter months contributed to a fall of a third in second charge mortgage new business volumes,” said Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA.
“As consumer confidence improves and the economy re-opens, we expect to see a strong rebound in demand in this market.”
In the consumer car finance market, new business volumes declined by 27 per cent year-on-year to reach 123,125 cars in February. This represents £1.9bn in new advances, down by 24 per cent from the same month in 2020.
In February 2021, new business volumes for the consumer new car finance market fell by 34 per cent year on year, and for the consumer used car finance market declined by 25 per cent.
“The UK lockdown restrictions over the winter months contributed to a fall in consumer car finance new business volumes of just over a quarter,” said Geraldine Kilkelly, director of research and chief economist at the FLA.
“As car showrooms re-open and consumer confidence recovers, we expect a strong rebound in demand. The value of annual new business in the consumer car finance market is expected to reach its pre-pandemic level this year.”