26Jun

The latest data from the Finance and Leasing Association shows healthy recent growth in most sectors of the credit market, indeed in some cases, the increases have been substantial.

The favourable figures for the initial months of 2021 were achieved in spite of the fact the UK was back in full lockdown for most of this period.

Total asset finance volumes increased by 80% from April 2020 to April 2021. When we look at the first four months of 2021, business was 15% higher than for the equivalent period in 2020.

Commercial finance vehicle business in April 2021 was 140% higher than for the same month last year. Business volumes in this sector for the period February to April 2021 were 40% higher than in the same period in 2020.

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:

“The strong growth reported by the asset finance market in April was not unexpected given the adverse impact of the first lockdown on new business levels during the second quarter of last year. The latest figures show that the recovery in April was broad-based, with finance provided for investment in a wide range of vehicles, machinery and equipment.”

Growth in the car finance market was a massive 1276% when we compare April 2021 to April 2020, but this was largely because showrooms re-opened on April 12 this year, whereas they were closed throughout April last year. The growth in this sector when we compare January to April 2021 to the same period last year is just 13%.

Consumer finance new business was 147% higher in April this year than it was in the same month last year. However, according to this measure, business grew by just 1% when we compare the first four months of each year. Retail store and online credit volumes were 31% higher in January to April 2021 compared to last year.

Ms Kilkelly commented:

“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. 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.”

Second charge mortgage new business volumes were 176% higher in April 2021 than in April 2020. Annual growth was 7% when we compare February to April 2021 with the same period last year.

Initial figures for May 2021 show second charge lending of £90 million, compared to £21,000 in the equivalent month of 2020, so sales have risen by a factor of 4,286.