News
Lenders face weaker credit market and uncertainty on regulation, says FLA - Consumer credit statistics, April 2010
Consumer borrowing levels in April remain lower than the same time last year, according to new figures from the Finance & Leasing Association.
The amount of credit granted was 9% lower than in April 2009. Store card lending contracted by 14%, credit cards by 12%, store instalment credit by 19%, unsecured loans by 42% and second-charge mortgages by 20%. The only exception was car finance provided through dealers, which was up by 15% in April compared with the year before.
The FLA’s figures suggest that consumers remain cautious about spending in the uncertain economic climate and with unemployment rising.
Prolonged uncertainty over whether responsibility for consumer credit regulation will be transferred from the Office of Fair Trading to the new Consumer Protection and Markets Agency, would risk making the market situation more difficult for lenders.
Fiona Hoyle, FLA Head of Consumer Finance, said:
“Consumer spending is vital to the economic recovery. Today’s figures show how fragile the consumer lending markets remain. The Government should help reduce uncertainty in the markets by clarifying its plans for consumer credit regulation.”
Table 1: New consumer credit lending, April 2010
| Apr 10 | % change | 3 months to Apr 2010 | % change | 12 months to Apr 2010 | % change | |
| Total FLA consumer finance (£m) | 4,108 | -9 | 13,022 | -3 | 52,095 | -9 |
| Store cards (£m) | 172 | -14 | 479 | -16 | 2,441 | -12 |
| Credit cards (£m) | 2,462 | -12 | 7,499 | -7 | 31,557 | -7 |
| Store instalment credit (£m) | 170 | -19 | 575 | -11 | 2,481 | -1 |
| Second mortgages (£m) | 20 | -20 | 75 | -15 | 326 | -73 |
| Direct unsecured loans (£m) | 168 | -42 | 601 | -35 | 2,462 | -45 |
| Car finance (£m) | 1,030 | +15 | 3,564 | +23 | 11,954 | +5 |
- ends -
Note to editors:
The Government has stated that it plans to reform financial services regulation but, we have had the Mansion House speech and the Budget statement, and it has yet to confirm whether the new Consumer Protection and Markets Agency will also regulate the consumer credit market in which FLA members lent over £50 billion in the last 12 months.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993