Finance & Leasing Association (FLA) members reported an annual rise in new business for consumer finance, car finance and second charges in April.
FLA figures showed that consumer finance new business grew by 147 per cent year-on-year to reach £7.7bn in April. In the first four months of 2021, new business was one per cent higher than in the same period in 2020.
The retail store and online credit sector reported new business up by 31 per cent in April compared with same month in 2020, and growth of eight per cent in the first four months of 2021.
The credit card and personal loan sectors together reported new business up by 61 per cent in April compared with the same month in 2020, but a fall of 12 per cent in the first four months of 2021.
184,016 cars purchased with advances worth £3.06bn, a year-on-year increase of 1,276 per cent and 1,557 per cent respectively.
“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,” said Geraldine Kilkelly, director of research and chief economist at the FLA.
“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 per cent in 2021 as a whole, and by a further 16 per cent in 2022.
“The consumer car finance market received a boost in April as showrooms re-opened, with the significant growth rate also reflecting the all-time low level of new business recorded in April 2020 at the start of the first lockdown.”
In April, there were 1,890 new second charge agreements worth £81m, a year-on-year rise of 176 per cent and 154 per cent respectively.
“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,” said Fiona Hoyle, director of consumer and mortgage finance and inclusion at the FLA.
“The market is expected to record a strong recovery in new business levels during the second half of 2021.”